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The number of second homes in Devon has dipped in the last year as owners flip their properties to holiday lets as they take advantage of the Covid pandemic staycation boom.

As well as income from holiday letting, there are other financial benefits to second homeowners flipping their properties – the small business rates regime, which covers 96 per cent of holiday homes in England, means that they pay little to no property taxes.

A holiday letting rental price “boom” in Devon’s tourist hotspots has led to the shift, with restrictions on foreign travel to other countries resulting in a rise in demand for domestic holidays.

Official government figures reveal there are 13,593 houses and flats in the county classed as second homes for council tax purposes – down from 14,086 in October 2020.

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These homes are unlived in, but fully furnished – and can include “buy-to-leave” properties, which are purchased as investments that are left unoccupied in the expectation that their value will rise.

Despite the drop, Devon still has one of the highest rates of second homes in England, at one in every 42 homes – more than double the national average.

Separate analysis of government figures from the Atlas Group shows that more than 11,000 second homeowners nationally have converted their properties since the start of the pandemic.

In Devon, the number of holiday homes trading as businesses has jumped by 16 per cent – as of August, there were 7,522 classified as holiday homes in the area, compared to 6,474 properties in March last year.

The government announced in March that it would legislate to tighten tax rules for second property owners in England, meaning they will only be able register for business rates if their properties are genuine holiday lets.

Holiday homes were also entitled to grants last Spring worth £552.2 million to support non-essential retail, hospitality, leisure, personal care and accommodation sectors at the start of the pandemic, while top up grants worth a further £256.8 million were made available in January during the third national lockdown.

“Restart grants” announced at this year’s Budget provided further grant funding of £522.3 million, taking total grant support to £1.3 billion, according to Altus Group’s annual business rates review.

However, while these owners have been cashing in, campaigners say both second homes and holiday lets can lead to problems in housing access for local residents.

Will McMahon, director of Action on Empty Homes, said: “In the last five years we have seen an escalating housing crisis while the number of long-term empty homes and second homes keeps rising.

“This year’s figures seemed to show second homes numbers dropping at a time when communities around the country were reporting the opposite – now we know why.

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“It turns out this isn’t happening at all, they are just switching to business rates in huge numbers to dodge council tax and avoid penalties for being kept empty.

“Today there are nearly 100,000 families and over 120,000 children stuck in overcrowded and insecure temporary accommodation because of a shortage of social housing.

“Yet over half a million homes have no one living in them because they are either long-term empty or are used as holiday lets.

“It is time that we looked at meeting housing need in this country before delivering developers’ and landlords profits.

“That means getting unused homes back into use and improving the powers we offer councils to limit homes being turned into holiday homes or Airbnb-type short lets.”

Action on Empty Homes don’t think that holiday homes shouldn’t be allowed, but say that if local planning is to mean anything then councils should be able to exercise control and make the right choices to meet local community needs.

That might mean saying ‘yes’ to planned holiday parks but ‘no’ to residential homes being bought up and turned into Airbnbs.

They argue that councils need better powers to get empty homes into use, along with meaningful planning powers that offer local residents the chance to put meeting housing need first and ensure that new developments build homes that are lived in; and that homes classed as residential don’t turn into businesses that house no one and push up local rents and house prices.

By Colleen Smith

Source: Devon Live

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