The move by Cornwall Council to ensure that all newbuilds in St Ives are bought by full-time local residents has brought the second home market under the spotlight yet again. The move by the council, which would see planning permission refused for newbuilds not reserved by local buyers, will likely be challenged in the courts due to its discriminatory nature. However, this now begs the question do second home owners get a raw deal in the media?
Protecting first-time buyers
While there is no doubt that first-time buyers are the lifeblood of any local property market the average price of property across the UK has risen dramatically over the last 20 years or so. Even though there is much focus on areas where the affordability factor has run out of control, it is worth noting that many areas of the country are still affordable for first-time buyers. Whether there are relevant employment opportunities in these regions is another matter but to suggest that all homes are out of the reach of first-time buyers is not strictly speaking correct.
Cornwall Council is one of just a handful of councils across the UK looking to protect local property buyers via the new build market. In many ways you could argue at least the councils are looking to protect local residents but in areas like St Ives there is also a blooming holiday market. If you are saying to holiday lets and second home homeowners that their money is not wanted, will they go elsewhere?
Supporting markets in difficult times
It is no coincidence that second home owners come under the most pressure when property markets are recovering and prices are moving ahead. Where was the criticism from the authorities in the aftermath of the 2008 economic downturn? Were they complaining about second home owners supporting local property markets then? Do we also need to take into account funds injected into the local economy via the holiday let and second home market?
In a perfect world there would be appropriate housing put aside for the first-time buyer market and local residents but this is not always possible. Indeed many second homes will also be let out to the local workforce and visitors to the region when not required. There needs to be a balance between welcoming outside investment while also protecting the very heart of the local community.
Is this a sensible move by the authorities?
While the move by Cornwall Council to restrict new build properties to local residents only has certainly grabbed the headlines, what is the view of property developers? If there is limited competition, and indeed attempts to push property prices down, this would likely reduce the potential profit for property developers? As a consequence, why would property developers concentrate their funding and effort on properties which will eventually create a reduced return when the rest of the UK is crying out for newbuilds with no restrictions?
It will be interesting to see how this particular move develops and whether indeed various challenges in the courts are successful. The move is by its definition discriminatory but is this in the best interests of the local community or could it drive away outside investment?