In the midst of England's escalating housing crisis, the issue of second home ownership has emerged as a topic of intense scrutiny. Second homes are often seen as an underutilized luxury, a perspective encapsulated by the notion that they are "a luxury that deprives other people of a necessity." This sentiment is gaining traction as policymakers and citizens alike grapple with the implications of second homes on the housing market, especially in tourist areas where they exacerbate the already dire situation.
The inheritance tax allowance in England increases by 54% if a home is passed on to family members, offering an incentive for maintaining multiple properties within families. This policy is part of a broader array of subsidies and tax breaks that successive governments have provided to second home owners. Despite these incentives, the housing landscape in England remains fraught with challenges. With over 1 million empty and underutilized properties and 100,000 families in temporary accommodation, the disparity between available housing and those in need is stark.
In areas like Labour-run Hackney, more than 1,000 homes lie empty, including a three-bedroom house that has remained unoccupied for seven years. These empty dwellings contribute to the housing crisis, yet the Housing Act 2004 empowers local authorities to take out an empty dwelling management order to ensure such properties are utilized for housing. However, this measure has not been widely applied, leaving many properties unused.
The problem is particularly acute in tourist hotspots, where platforms like Airbnb and the prevalence of second homes have driven up property prices, making it difficult for locals to find affordable housing. The UK government's encouragement of second home ownership through lucrative incentives has drawn criticism. Owners of multiple properties typically enjoy a comfortable financial position, bolstered by what some describe as a grotesque package of government handouts.
Policymakers face mounting pressure to address this issue with measures akin to those used to curb cigarette smoking. Just as it took years of health warnings and significant tax rises to reduce smoking rates, a similar approach may be needed to deter excessive second home ownership. Distinguishing between homes used as primary residences and those used as second homes or short-term lets could be a critical step in rectifying the imbalance in the housing market.
The scale of the problem is underscored by the staggering number of individuals on social housing waiting lists—1.1 million people are currently waiting for adequate housing solutions. This figure highlights the urgent need for effective policies that prioritize housing as a necessity rather than a luxury.