Council tax clampdown – Fears for UK homeowners as cap increased by 300%

Martin Lewis speaks on council tax updates

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

The Welsh Government is tripling the maximum amount of council tax that such homeowners can be charged and there are fears this will happen all over the UK. The cap will increase by 300 percent amid concerns that holiday home demand is driving house prices up rapidly.

The cap is being raised from its current level of 100 percent, an amount that was paid on more than 23,000 second homes and long-term empty properties.

The announcement follows the growing popularity of rural or coastal areas in Wales, such as Pembrokeshire and the Brecon Beacons.

These areas have always offered appealing countryside, but that took on a new appeal amid the pandemic when people craved more rural space.

The location even became one of the most favoured destinations for Londoners seeking a second home, according to The Daily Mail.

This helped to push up house prices, with average values in Pembrokeshire increasing 13.4 percent during the past year, to reach £208,900, according to property website Zoopla.

The Welsh Government said the new levels of council tax would help restrict second homeowners and address unaffordable housing facing some communities in Wales.

However, experts warned that the measures could end up restricting the supply or property and pushing up values even higher.

North London estate agent Jeremy Leaf, said: “The Welsh Government’s proposals at first glance appear laudable. Any policy which seeks to make more properties available to purchase for local people at affordable prices should be welcomed.

“For too long, prices in picturesque Wales have likely been inflated by second-home owners and those seeking to let their properties for holidaymakers – many from London and other major cities – which has pushed them even further beyond the reach of locals.

“However, markets never work as simply as that and the Welsh Government needs to be careful it isn’t creating a larger problem if the change contributes to a reduction in supply, pushing property prices even higher.”

In England, there are hundreds of thousands of homes being left empty for more than six months.

In total, these have reached more than 235,000 properties, with some being owned by second homeowners who are only using them for part of the year.

Lettings body Propertymark says action is needed to bring these homes back into use to help ease pressure on existing housing stock and help improve local communities.

It also says that an increasing number of short-term holiday lets in certain parts of England are reducing the number of much-needed homes to rent and buy.

Propertymark is renewing its call for the UK Government to introduce measures to reduce the number of empty homes.

It has welcomed the measures outlined in the Levelling Up White Paper to address the issue.

These include restarting the Empty Homes Community Grants Programme that was in place until 2015.

Propertymark also said many councils require a speedier process for obtaining compulsory purchase orders on long-term empty homes.

It suggested homes are sometimes left empty due to the death of the owner and complications over inheritance. For example, if a property is jointly inherited, it can take time for all parties to agree what to do with it.

Alternatively, an owner may have previously rented a property that now requires improvement work.

Source: Read Full Article