Second home owners targeted by Lib Dems

Owners of second homes would be in line for higher council tax bills under Liberal Democrat proposals to stem rural house price inflation.

The party announced this week it would allow councils to double the amount they can levy on second homes, in an effort to prevent local residents being priced out of the property market.

While the policy aims to curb demand for holiday homes in rural areas, the Lib Dems have confirmed it would apply nationally, meaning those who own second homes for work purposes could be equally affected.

The most recent census figures, from 2011, show that Westminster and the borough of Kensington & Chelsea counted as many second home owners combined as Cornwall, where party leader Nick Clegg announced the policy. The Lib Dems are fighting to hold on to three of the county's six parliamentary seats in May's election.

"It is difficult to see how the doubling in council tax would by itself make housing more affordable for local buyers," said Andrew Smith, head of real estate at law firm Bircham Dyson Bell.

Lucian Cook, head of residential research at estate agency Savills, said any rise in the levy, which funds local services, would be unlikely to curtail demand among affluent buyers on the hunt for a second home.

"If the economy continues to recover, it's around this point in the cycle that you would expect demand [for second homes] to pick up."

Liam Bailey, global head of research at Knight Frank, said that depending on the scale of increases to council tax, it would be "unlikely to lead to a notable change".

He added that any rise in local rates would continue a longer term shift towards additional rates of council tax, which started with the removal of the automatic council tax discount for second homes in 2011.

In Cornwall, which was the first local authority to abolish these discounts, the proportion of second homes stood at 4.3 per cent in 2011 - comparable with parts of the London commuter belt, such as the Chilterns and Mole Valley, in Surrey.

According to the census data, areas of England and Wales with the highest rate of second home ownership include Gwynedd (9.9 per cent) in north-west Wales, and the Lake District (8.3 per cent).

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation