Increased council tax on second homes is expected to raise an extra £4.8m for local authorities in the South-west this year, a paper from the region’s government office has found

The council tax discount on second homes was reduced from 50% to 10% in the Local Government Act 2004, which came into force on 1 April this year. Most councils in the region will plough a high proportion of the funds into new affordable housing. Penwith council, for example, expects to raise £1.8m over the next two years. Penwith Housing Association in Cornwall, set up after a stock transfer from the council, has started building affordable homes in the area with the money. South Hams council has raised about £2m for affordable housing, equivalent to about 130 new homes.

A spokesman for the National Housing Federation said: “This increases the overall funding for new affordable homes in the South-west by over 5%, or potentially another 200-250 homes a year. That’s great news, given the huge and rapidly rising scale of housing needs in the region and how many homes we are losing through right to buy. We urge all local authorities to follow the lead of Devon and Cornwall.”

More affordable housing is particularly needed in these areas because second homes push up house prices, making housing less affordable for local people.

Source

Housing Today