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Rise in number of people with additional properties, Resolution Foundation finds

More than one in 10 people in Britain own second homes, buy-to-let and overseas properties worth a total of almost £1tn, a study has found.

Research by the Resolution Foundation think tank, funded by the Nuffield Foundation, said the latest data, compiled for the years 2014 to 2016, shows that the proportion of adults who live in a family with property other than their main residence rose from 7.9% (3.6 million people) in 2001 to 11.2%, or 5.5 million people.

Based on individual owners rather than families that benefit from additional property wealth, the report found about one-in-ten British adults reported holding some form of additional property themselves in 2014-16, more than 4.3 million people.

The report also found the value of additional property wealth has increased from around £610bn in 2001 to £941bn over the same period.

Additional properties accounted for 15.8% of the total £6tn of overall property wealth held by households in Great Britain in 2014-16.

Additional property wealth is accumulated over time and is most common among older generations, said the report.

Around one-in-six of those born in the 1950s had additional property wealth in their family in 2014-16.

Buy-to-let property accounts for the largest group of additional property owners (1.9 million people), followed by second homes (1.4 million) and then overseas property (970,000 people).

Looking at change over time, the biggest component of the increase in additional property ownership from 2008-10 to 2014-16 was in buy-to-let properties, the report found.

The number of people owning buy-to-let property rose by more than 50% over this eight-year period.

The report also pointed out the number of buy-to-let mortgages has also risen 15 times since 2000.

Three major reasons for owning additional property were providing rental income, giving security in retirement and passing on wealth to younger relatives, the report found.

“Multiple property wealth has grown rapidly over the last two decades,” policy analyst George Bangham said.

“While young people in particular are less likely to own their own home than previous generations, those that do own are more likely to have more than one property.”

It was found that 37% of people born in the 1980s owned property wealth at age 29, compared to 50% of people born in the 1960s.

In an era when “generation rent” exists alongside the highest levels of property wealth that the country has ever seen, the report concluded there is a case for thinking more broadly about how to ensure that housing is taxed fairly and efficiently, and how to reduce its concentration so that each generation has a fair opportunity to own a home of their own.

Mr Bangham said the sheer scale of additional property wealth is an important driver of rising wealth gaps across Britain.

“As the huge stock of second homes, buy-to-let and overseas properties starts to be passed on to younger generations, Britain risks becoming a country where getting ahead in life depends as much on what you inherit, as what you earn,” he added.

Source: Yahoo Finance UK

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Second home ownership soars towards the value of £1 trillion

The number of British people owning a second home has soared by more than 50 per cent since 2001 as the value of additional property wealth nears £1 trillion, according to a new report.

Research from think tank the Resolution Foundation revealed that 5.5 million people – around one in ten of the UK population – own a second home, buy to let or overseas property, up from 3.6 million in 2001.

The jump was driven by buy to let mortgages, which have risen 15 times since the turn of the century.

Wealth from second homes owned by UK adults has also risen over the same period to £941bn.

It found that while 50 per cent of people born in the 1960s owned a property by the age of 29, that dropped to 37 per cent among those born in the 1980s.

One in six baby boomers – 1.2 million people born in the 1950s – reported owning extra property, the data from 2014 to 2016 revealed.

Despite the surge in second home ownership, the number of millennials owning a home continues to fall.

The report urged policymakers to rebalance the housing market to help first-time buyers.

Resolution Foundation policy analyst George Bangham said: “While young people in particular are less likely to own their own home than previous generations, those that do own are more likely to have more than one property.

“And as the huge stock of second homes, buy-to-let and overseas properties starts to be passed on to younger generations, Britain risks becoming a country where getting ahead in life depends as much on what you inherit, as what you earn.”

By Callum Keown

Source: City AM

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How second homes boom is hollowing out Yorkshire Dales villages

Increasing levels of second homes ownership in the Yorkshire Dales have left the national park with a “flight of working-age people, school closures, loss of services and hollowed-out communities”, local politicians and campaigners have said.

The Yorkshire Dales national park authority chairman, Carl Lis, said people looking to the area for a picturesque bolthole were stimulating the housing market and helping to create “a gaping affordability gap between house prices and local wages”.

Around 1,500 properties in the Yorkshire Dales are second homes – more than 10% of the total housing stock.

When Yvonne Peacock’s two sons were little in the late 1970s, their home of Bainbridge, a small village in the national park, was full of children. “There were loads of them. They all used to play out on the village green,” she recalls. “You don’t get that any more.”

Peacock, now the leader of Richmondshire district council and a local business owner, has lived in Bainbridge all her life and has watched as the shops have closed and the local primary school has gone from having more than 100 pupils when she was a child to just over 20 today.

“This one here is a second home. That one over there is a second home. The one up there is a second home,” she says, gesturing at empty stone cottages that can be seen from the window of her tearoom in Bainbridge. “Every time something goes on the market it’s sold as a second home because our own people can’t afford to buy them.”

In an attempt to tackle the problem, Peacock has joined forces with Richard Foster, the leader of Craven district council, and Lis to call for more powers to “significantly increase” council tax for second home owners. Though the scale of the proposed increase is yet to be determined, it is likely to be more than double. The national park’s chief executive, David Butterworth, has previously suggested it could be increased by more than 10 times, calculated on the economic loss to the area caused by homes lying empty for most of the year.

A detailed proposal to tackle the problem of second homes – including raising council tax – will be brought to a meeting of the national park authority on 19 December. If approved, the plans will then go to the national park’s constituent local authorities for consideration.

While Peacock has nothing against the second home owners personally – they do, after all, share her love for the national park’s distinctive rolling landscape – she says the fact they are only in the area for a fraction of the year costs the local economy dearly. “Something has to be done to make sure our villages don’t die.”

Research published last month by the Centre for Towns, a thinktank, showed that since 1981 Britain’s smaller towns and villages had lost more than a million people aged under 25 and gained more than 2 million over-65s. “All across the north of England we have seen a flight of young people from the more remote rural areas like the Dales – and only a trickle of young people and families have come in to replace them,” said Foster as he announced council tax proposals this week.

Langthwaite, Yorkshire Dales

The Dales is one of a handful of national parks to have made public calls for developers to look within their borders for sites for new affordable housing, recognising that the locals who keep the parks running – providing shops and services – are being priced out.

Efforts to reverse this trend with more housebuilding have not gone unopposed. The Campaign to Protect Rural England has said local authorities are sacrificing the UK’s most beautiful landscapes to developers, publishing research showing that nearly 15,500 houses have been approved in designated areas of outstanding natural beauty in the last five years, and the annual number rose 82% in the period.

Foster said the “immense amount of work” put into building new, affordable homes in the park was being cancelled out by people coming into the park to buy their second homes. “I think we’ve come to the point where we would not be doing our duty if we didn’t take a serious look at second homes,” he said. “Do we really want to be known as the generation that sat on our hands while our communities fell apart?”

Recently married Carl and Sam Atkinson, 37 and 30, have just managed to buy their first home, in Askrigg, near the White Rose pub they help Carl’s parents to run. They had been living with Carl’s parents in a two-bedroom house at the back of the pub for more than a year. “There are forever three-bedroom houses on the market, but they are going for £350,000, and a two-bedroom house is £200,000-plus. We’re not hard up, but we really struggled to get a house,” says Carl. “The guy who we bought ours off wanted it to go to a local couple and if it wasn’t for that we would have been outbid.”

Ten miles up a single-track road from Askrigg is Arkengarthdale, where around 35% of the houses are second homes. Arkengarthdale C of E primary school, founded in 1659, currently has only 14 pupils.

“We are trying very hard to keep the school open as it gives a heart to the community, but it is difficult,” says Charles Cody, the chair of governors, who runs the 18th-century Charles Bathurst Inn over the road. Pupil numbers have fluctuated for a few years now – the school had close to 40 children around five years ago – but the school’s leadership can see there aren’t enough local children approaching primary school age to secure its future.

“We know most of the people who live in the dale, so we can just see that children aren’t coming through in sufficient numbers,” says Cody. “Looking forward, if nobody new moves into the area, we are going to struggle.”

Peacock says the proposal to raise council tax for second homes is not about a cash-strapped local authority trying to raise revenue. It is about incentivising the sale or renting out of second homes in order to bring them back into full-time occupancy. “For a twentysomething who returns from work each evening to a bedroom in their parents’ house, passing several empty houses on the way must seem very wrong,” she says.

Source: The Guardian