A market Open to All …Except Local People

Please note: This article was originally posted on 11/12/06

AN ARTICLE FOR THE HOUSE MAGAZINE

It is almost as if the housing market operated in spite of the existence of local people on local wages in my West Cornwall and Isles of Scilly constituency.

I have recently published an estate agents survey report. It shows that during the last year, across my constituency, of all properties sold five times as many have gone to second home buyers as to first time buyers. Indeed, in some parts of my constituency, estate agents told me that 65% of all properties sold went to second home buyers and 0% to first time buyers.

I am really not interested nor motivated by the “politics of envy”. I really wouldn’t care whether people own hundreds of homes for their recreation and investment, if their endeavour or talent means that they are rich enough to do so. But I don’t think that this should simply be allowed to happen if there are not enough “first homes” to go around.

Indeed, I always argued strongly against a council tax system set up under the Conservatives in the early 90s which permitted a 50% council tax rebate for second home owners. Hundreds of millions of pounds of taxpayers money were used to subsidise the wealthy to buy their second homes through this tax subsidy while many thousands of local folk on local incomes in these areas of second home ownership could not afford their first home.

Such high levels of second home purchases not only have the effect of dictating market conditions and severely skewing affordability, but also creates villages which make it very difficult to sustain a community infrastructure – schools, shops, post offices, village halls and the best of village life. Indeed, it is no accident that in those areas with very high second home ownership within my constituency, school roles are at an all time low as local families with young children can no longer afford to live in those villages. Threats to the future viability of local schools is high on the agenda.

And local authorities cannot simply build their way out of our present housing problems. Cornwall is a classic example where simply building more homes does not provide a solution.

Cornwall itself has developed at a breathtaking rate since the early 1960s. The number of homes has more than doubled from 110,000 in 1961 to 228,000 now. Yet during that time, despite this phenomenal growth in the availability and supply of new housing, the problems of local people on local incomes has become far more acute. Lack of affordable housing is, without question, the most serious social problem affecting this part of the country – and we are an area with the lowest incomes in the country and with many other problems of poverty and high cost of living.

Added to this, many people are amazed to learn that, in my constituency, we have two districts (Kerrier and Penwith) with amongst the highest levels of population density in any rural local authority in the country. Therefore, appropriate and developable land is scarce and it is a bone-headed crime to see that so much of it is being used simply to feed the developers desire to build more unaffordable executive style homes way out of the reach of local people.

Unfortunately, the planning system is fuelled by greed rather than by need and it is time for a Government to give local authorities the genuine tools to better control their own destiny rather than to be turned into a developers paradise – as much of Cornwall has become.

Added to this, the Government can give local authorities powers to better control second home ownership thus improving the opportunities for local people.

One method would be that of changing the Use Class Order so that second home purchasers would need to apply for a “Change of Use” from the local planning authority and planning authorities would be given the power to constrain either the numbers or proportion of second homes as set out in their Local Development Frameworks.

Another mechanism to discourage second home purchases would be through either the granting of permissions to local authorities to increase Capital Gains Tax income from second properties or by applying such a rule nationally.

Cornish people are relatively stoical. Frankly, I am amazed that they have remained as good natured and stoical as they have in circumstances where many thousands of local families live in completely unacceptable housing situations at the same time as many of the most attractive homes, once occupied by their ancestors, lie empty or idle for the majority of the year.

In present circumstances, doing nothing is no longer an option.

Andrew George MP 11th December 2006