Will the ban on second homes in Whitby backfire?

Posted 28th June 2022 by ctatax-admin

Cornerstone Tax is the UK’s leading property tax advisers, specialising in Stamp Duty Land Tax. We’ve reclaimed over £15 million in overpaid SDLT in the last 12 months. Contact us to see if you are eligible for a refund

Read the article on Estate Agent Today

“A property expert has warned against bans on second home sales and has suggested giving local buyers first refusal instead.

It comes after residents of seaside town Whitby last week voted that all new build and additional housing in the parish should be restricted to primary residences.

While not binding, 2,111 or 93% of respondents voted in favour of the measure.

It joins Fowey, St Ives and Mevagissey to have voted on the restriction.

Communities hope that by restricting the sale of second homes, properties will become more affordable for local residents and help to grow local small businesses within the area.

Data from Rightmove shows the average house price in Whitby is £254,218 in contrast to the typical salary in the town of £18,900, with the influx of second home purchasers pushing properties out of affordability for many local residents, according to analysis by property advisory firm Cornerstone Tax.

Read: Top 10 Stamp Duty Reliefs

But David Hannah, group chairman of property advisory firm Cornerstone Tax, said the move could create a more fractured market as it could reduce supply and push up prices for all types of property.

He said: “Whilst I understand this measure taken by Whitby and other communities around the UK, I think it has the potential to create an even more fractured market in these locations.

“By limiting the sale of second homes, it will decrease the supply, however I believe the demand will remain high – causing the value of second homes to increase even more.

“I do think there are other potential solutions rather than simply limiting the market in this way.

“Perhaps a better idea might be to allow local communities a window of time when a home is initially listed, before it becomes available to any potential buyer.”

Cornerstone Tax is the UK’s leading property tax advisers, specialising in Stamp Duty Land Tax. We’ve reclaimed over £15 million in overpaid SDLT in the last 12 months. Contact us to see if you are eligible for a refund