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Brokers welcome second home ‘ban’ in ‘overpriced’ coastal resorts

  • 28/06/2022
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Brokers welcome second home ‘ban’ in ‘overpriced’ coastal resorts
The decision to ban second homeownership in Whitby has been largely welcomed by brokers, with the possilbity that it is likely to be followed by a similar ban in Brighton.

Earlier this month Whitby became the latest tourist hotspot to vote for a limit on the sale of second homes.

The move followed concerns from locals who said they were being priced out of the housing market by wealthy buyers who were coming from out of town and buying up properties as holiday homes.

In a poll carried out by the council, 93 per cent of Whitby residents voted to restrict the sale of new-build housing to full-time residents.

In Brighton, last week councillors were reported to have asked their officials to look at ways to ban second homes and holiday lets in Brighton and Hove.

The idea, which will reportedly not be a blanket ban, will target hotspots rather the entire city and as with Whitby the ban would apply to new builds only.

Whitby, immortalised by Bram Stoker’s Dracula,  experienced the second highest house price increase of any coastal resort last year, rising 17 per cent, according to RightMove. The only place where prices increased more was in Padstow, Cornwall. An estimated 28 per cent of properties in Whitby are second homes.

Post pandemic property

Samantha Bickford, mortgage and equity release specialist at Clarity Wealth Management said the problems experienced in places such as Whitby had been exacerbated by the pandemic.

She said: “An impact of Covid has seen wealthy city property portfolio investors buying property in seaside or rural towns to benefit from the UK staycation craze.”

“This pushes out the locals who wish to own a property in their local area further pushing up the house prices due to short supply and huge demand in their hometowns.”

Bickford said several disappointed clients of her in the past couple years had been  been gazumped by what she said were investors paying over the odds for a property that will become a holiday home instead of a family home”.

She added: “Restricting second homes in certain hot spots will mean first-time buyers and movers have more opportunities to buy a home where they live and work, perhaps small Cornish beach towns could also benefit from this limit.”

Robert Payne, director at Langley House Mortgage, said there was obvious logic to the ban to protect locals from over inflated house prices.”

He said: “I completely agree with it and think home ownership should be prioritised over holiday/second home ownership. It will be interesting to see if more hot spots follow suit and if this opens the gate for other rules around property ownership designed to protect buyers.”

Ashley Thomas, director at Magni Finance, said that while he can understand the frustrations of first time or local buyers, there was a case for second homeownership to help improve local areas.

He said: “I had a client that recently purchased a second home in Brighton. Whilst I understand the positives around assisting first-time buyers, it can negatively impact other people.”

“For those who have properties already, their house value is higher due to demand from people buying second homes. If the area is restricted to locals, this could reduce the local prices, making existing home owners worse off. It is worth noting that people who buy second homes will invariably have a good income to afford having another property. Those who have second homes can bring value to the local area.

“They spend money on local goods and services that help the businesses, this in turn provides jobs to the local economy. This happens in a number of areas in the UK including London – with foreign nationals buying a second home. If you change the rules for one area, where do you draw the line?”

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