East Suffolk Council votes down doubling second home tax
A motion to fund social housing in East Suffolk by doubling council tax on second homes, once this becomes an option, has been voted down by East Suffolk Council.
The motion was brought to the council by David Beavan, Liberal Democrat councillor representing Southwold, during a full council meeting on Wednesday.
This follows an announcement in May of the Levelling Up and Regeneration Bill, which would allow councils to introduce a council tax premium of 100% on second homes – those not lived in for at least 70 days a year. Provided it gains royal assent, changes included in the bill will take effect from 2024.
Cllr Beavan said: “The real damage caused by the spread of second homes on our coast is that the local resident community is priced out of the housing market.
“Locals, on average salaries of £30,000, have no chance of ever buying their own home at an average price of £500,000.
“One family home recently went for £3 million. Even beach huts go for £250,000. A so called ‘affordable’ tiny two-bed flat at the old hospital with no garden or parking remains unsold for shared equity at £400,000. A buyer would need to earn £50,000 a year to pay the combined mortgage and rent.
“The private rental market has also collapsed as landlords evict long-term tenants in favour of earning £1,000 a week as holiday lets.
“Those residents still left are also tempted to sell their house as a holiday home to live comfortably on the equity released by buying a cheaper home away from the coast.
“Our coastal communities will inexorably be hollowed out and eventually left with no residents.
“Will people still want to visit a holiday park? Most visitors value sport on the common, arts centre plays, church bells, a primary school – all the essentials of a thriving local community.
“And who will do the cleaning or serve meals in the evening? Already, pubs are short of kitchen staff because people can’t afford to live locally and there are no late buses. Businesses are now having to offer accommodation to fill vacancies.
“Eventually, the uncontrolled spread of tourism will kill the goose that lays the golden egg.
“Tourism is the lifeblood of our communities on the coast but we must find a way for it to coexist with a living community. The only answer is more homes for social rent.
“House prices have continued to rise through the pandemic so that on average a second home has appreciated in real value by £30,000 a year. I think most owners would be ok with contributing just £2,000 a year as double council tax to keep our communities alive. It would only be fair.”
Cllr Beavan’s motion suggested using the money made through the council tax premiums to fund Community Land Trusts to provide social housing for rent in the wards affected by second homes, such as his Southwold ward.
Community Land Trusts are not-for-profit organisations that own and operate land for the benefit of the local community.
According to the Department for Levelling Up, Housing and Communities, there were 7,883 second homes in Suffolk and north Essex in 2021 – 4,113 of which were in East Suffolk.
The motion estimates these could provide £7.6 million annually for East Suffolk, of which the East Suffolk Council would receive £700,000; at a cost of roughly £210,000 per home, three new homes could be built per year.
Included in the motion was also a suggestion that Suffolk County Council and the Police and Crime Commissioner might work together to utilise the entire £7.6 million on housing, meaning 36 could be built a year.
Conservative councillor for Eastern Felixstowe Steve Gallant said: “I note the good intentions contained within this motion.
“I’m sure all members will be only too pleased to join us in thanking the Conservative government for the proactive way they have reacted to the ongoing issues caused by excessive second home ownership.
“However, I fear that the mover of this motion has once again failed to really think through what it is they are asking for.
“It is one of our guiding principles of financial management that we do not commit funds to any project until we have actually received them.
“The Levelling Up and Regeneration Bill is not expected to complete its passage through parliament until spring 2023.
“There will then be a requirement for the property owners concerned to be given 12 months’ notice of the intended premium.
“The financial benefits of local authorities will therefore not be realised until 2024 or 2025 at the earliest – assuming the bill recieves royal assent on that timescale.
“It would be completely contrary to good governance and the financial prudence of this administration to consider allocating any of this funding in advance of its receipt.
“It would, in fact, amount to an empty promise – something that this Conservative administration does not make.”
A preliminary analysis of the Reydon, Southwold and Wangford housing need survey by Artisan Planning and Property Services found that 30 people declared a housing need now and 11 were registered on the council’s waiting list; 72 stated a predicted need for alternative accommodation in the next ten years.
27 responses stated they knew someone who had left one of the three regions due to lack of accommodation, 25 of whom would move back if suitable accommodation became available.
Labour councillor for Kirkley and Pakefield Peter Byatt said: “We will abstain on this motion, but not because we are opposed to the principle. I think this is a good thing to do.
“I understand Cllr Beavan’s sentiments about his particular area of East Suffolk.
“My problem with this is, it’s about having the money. What if these people who have second homes find a way around not paying that council tax?
“We cannot count on having the money until it is in our hands.
“I know how people can use clever budgeting and financial advice to get around things like this, and they may be able to get around the 70 days per year rule.”
In response to Labour and Conservative councillors’ criticism of the motion, Cllr Beavan said: “If we’re not allowed to commit any money ahead, what on earth was the chancellor at central government doing raising National Insurance for social care?
“If they’re allowed to do it, then why can’t we?
“Cllr Byatt talks about problems of enforcement – yes, some people will always find ways around things, but most people are honest.
“We think we can build a relationship between second home owners and the local community to keep that community alive.
“In the end, this is a very real threat in my area. Every week, a homeless family comes to me.
“The housing department are brilliant – they are working with the family and, so far, we’ve not had to evict anybody.
“But very soon, the family will have to leave. The adults will leave their jobs, the children will have to leave their school and they will lose their friends and family in this region.
“This is not right.”
Someone can be classed as homeless if they are staying in a hostel, night shelter or temporary accommodation.
The motion was lost, with Liberal Democrat councillors voting in favour, Labour abstaining and Conservatives voting against.
During Wednesday’s meeting, Cllr Beavan also submitted a question to Conservative councillor for Orwell and Villages Richard Kerry about the difficult process of applying for social housing through the online system HomeChoice.
He asked to include a ‘save’ option to prevent people losing the information submitted on a page if they did not meet the fifteen-minute time limit, but Cllr Kerry stated this was not needed as applicants are asked if they would like to extend the session when the time limit approaches.