Support for council tax premium on second homes

This story was published 16 November 2022

Senior figures from the housing sector have given their support to a landmark decision to place a council tax premium on second homes and help tackle a “chronic shortage” of affordable housing that is undermining North Yorkshire’s communities.

A scenic photo of Swaledale

Members have today (Wednesday, 16 November) backed plans to introduce a 100 per cent premium for council tax bills on second homes in the county within the next two years.

The new scheme will effectively double council tax bills for second home owners, and means that North Yorkshire is one of the first areas in the country to progress with adopting the Government’s new measures.

The proposals are ultimately aimed at bringing second homes back into use for local communities after many people have been priced out of the housing market in some of North Yorkshire’s most desirable locations.

It is also expected that the decision to introduce the premium will provide a multi-million pound boost to finance key council priorities, including a central aim to use the funding to help introduce more housing in areas particularly affected by the affordability crisis.

The National Housing Federation’s chief executive, Kate Henderson, voiced her support for the move to help tackle the issue of second home ownership, which is particularly prevalent in North Yorkshire’s vast rural areas and seaside towns.

She said: “I’m pleased to see decisive action being taken to address the housing crisis in North Yorkshire. There is a chronic shortage of truly affordable homes in rural areas, and where people can’t afford to live, they can’t afford to work, which ultimately damages rural growth and productivity.

“I’m glad to see that the revenue raised from these measures will be directed to providing the homes that communities sorely need.”

Analysis has shown that the introduction of a 100 per cent premium on council tax bills for second homes in North Yorkshire could generate in excess of £14 million a year in additional revenue.

The Scarborough district has the potential to bring in almost half of that figure due to the large number of second homes in coastal towns such as Whitby, Scarborough and Filey.

The research has shown that Richmondshire could generate about £1.8 million through the second homes premium, while the Craven, Harrogate and Ryedale districts could each provide about £1.5 million in extra revenue. Hambleton could provide £1 million and the Selby district a further £260,000.

The premium is outlined under an over-arching policy for council tax premiums and discounts which is being introduced when a new local authority spanning the whole of North Yorkshire is launched on April 1 next year.

The chief executive of the Northallerton-based Broadacres Housing Association, Gail Teasdale, said: “As the only housing association with its headquarters in North Yorkshire and with the vast majority of our homes being in the county, we have a vested interest in ensuring our communities remain sustainable for future generations which means having the right mix of homes.

“How many times do we hear of businesses being unable to recruit staff so they have to limit opening hours which adversely affects their ability to grow and contribute to the economy? Or a shortage of care workers so the ageing population in North Yorkshire struggles to get the care they need?

“By working with partners such as North Yorkshire County Council, the Yorkshire Dales and North York Moors National Park authorities we are committed to providing quality, highly energy-efficient homes that meet the needs of a range of people across North Yorkshire, whether that’s younger people, families or those with complex needs who require specialist housing and support.”

Council leader, Cllr Carl Les, welcomed the decision by today’s meeting of the full council to pursue the council tax premium on second homes, which he claimed is a “critical tool” in helping provide more affordable housing.

He said: “Today’s decision by the full council is a major step forward to helping tackle what has been such a long-running issue that has affected communities across North Yorkshire.

“It is heartening to have support from leading organisations involved in the housing sector, and the importance of trying to provide more housing for local communities should never be overlooked.

“To ensure people can live in the places they want to is vital to ensure that these communities remain sustainable for the future, and the council tax premium is a critical tool in achieving that.”

Members at the full council meeting have also backed proposals to maintain a zero per cent discount on second homes that is already applied by North Yorkshire’s district and borough authorities.

The plans would introduce a zero per cent discount for properties that are unoccupied or undergoing major repairs or structural alterations. The proposals will also see the continuation of a sliding scale of council tax premiums from April next year on properties that have been left empty or unfurnished for between two and 10 years.

However, the 100 per cent council tax premiums on second homes would not be introduced until April 1, 2024, if the Government’s new proposed legislation does become enshrined in law.

A lack of affordable housing across North Yorkshire has been a long-running issue, accentuated in many of the county’s rural and coastal locations that are among the most desirable places to live in the country. House prices in the Yorkshire Dales, for instance, are about a third higher than the county’s average. The average cost of a property in the Dales is nearly £400,000, while the weekly wage in North Yorkshire is just over £530.

There is a high demand for second homes, increasing the strain on an already limited housing stock. According to the National Housing Federation, there are 8,199 second homes in North Yorkshire - the highest number in the Yorkshire and Humber region.

Meanwhile, a streamlined approach to providing financial support running into millions of pounds to households in the greatest need has also been approved at today’s full council meeting to help to tackle the cost of living crisis.

A policy to unify the provision of financial aid for council tax bills will now be adopted from the spring of next year when a new council is launched to cover the whole of North Yorkshire.

Councillors backed the proposals which will provide up to 100 per cent reductions on council tax bills for households on the lowest incomes.

And a bold attempt for a unified scheme for council tax across North Yorkshire was also approved at the full council meeting today to ensure that hundreds of thousands of residents pay the same rate and provide millions of pounds to finance vital services.

The move to draw together council tax bills so that all households across the county are paying the same amount has to be instigated due to the largest overhaul of local democracy in North Yorkshire in almost half a century.

The advent of a new council covering the whole of the county in the spring of next year means that there is a legal requirement to ensure that all council taxpayers in North Yorkshire are charged the same amount.

The major task of unifying all council tax bills across the seven districts in North Yorkshire will see a phased shift spread over the next two financial years as some areas are paying higher rates than others.