Second homes tax could fund new affordable housing

A tax levied on the owners of second homes could be used to fund "community-led" affordable housing schemes.

Plans to divert an annual sum of £1m from the revenues are due to be discussed by North Yorkshire councillors next week.

If the motion is approved, the amount would help to deliver affordable properties in rural and coastal areas.

North Yorkshire Council said it was already "committed to using some of the £12m estimated to be generated annually by the second homes tax on housing initiatives".

Earlier this year, the council voted to approve a new 100% premium for council tax bills on second homes in the county, which would be imposed from April 2025.

The decision came after issues around the affordability and availability of properties in towns such as Whitby, which have large numbers of second homes and holiday lets.

The authority said that the original Community Housing Fund government grant, which could support affordable housebuilding and was awarded in 2016, had been spent.

In North Yorkshire, the number of "community-led" housing groups has grown from nine to 24, with the potential to deliver more than 120 homes.

These groups lead in the development and management of affordable properties, but were not able to access dedicated grant money once the Community Housing Fund had expired.

The groups require financial support to develop a scheme and take it through the planning process.

The council suggested that groups such as parish councils or "like-minded people" could run a project, and could either develop a housing site themselves or work with a housing association to manage it. The groups could choose tenure type, size, and allocation policies for the properties, and draw an income from them.

Executive member for housing, councillor Simon Myers, said:

“Providing more homes is one of our key priorities, especially in our rural areas where prices are high and are leading to young people moving away from our towns and villages.

“This scheme is the first in a string of measures we are working on to rectify this crisis.”

North Yorkshire Council also said it intended to work with registered housing providers and Homes England to encourage them to work together to offer advice and support for community-led groups.

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