Elliot Keck: Will the Reform UK councils pursue the war on second homes?

Elliot Keck is the Head of Campaigns for the Taxpayers’ Alliance.

Reform UK is now in control of a remarkable ten councils, all of them pinched off the Conservatives bar County Durham, which was previously a rainbow coalition of different parties. That poses challenges – after all, how will Reform councillors in county councils deal with the fact that they run social care providers – with libraries attached? Changing rules around flag-flying and scrapping EDI roles are worthwhile, but won’t be transformative.

But they will also be running three unitary authorities and a metropolitan borough, where powers are greater and budgets slightly more flexible. This gives them opportunities.

Critically, they will have to make a choice between a populist short-term approach to council budgets and decision-making, and a long-term pro-growth one. They will now have control over licensing, council tax, planning, and a number of other issues where the incentives will often push them in one way, often to the detriment of the local area in the long term.

The perfect example of this is housing. For decades, councils have taken a highly restrictive attitude towards development, usually driven by local concerns around pressures on services, dramatic changes to the character of a neighbourhood, and issues around the design of the development itself. Which isn’t to dismiss them – we’ve all walked down a street in a quaint market town only to be sucker punched by some hideous example of 1960s architecture. I can think of dozens of examples where I’ve asked myself why the local council for once decided to let a planning application slip through the cracks.

But these issues are all, essentially secondary, or can be ameliorated. Strict design codes which emphasise beauty can be enacted. Investment can be made in local services. Incentive structures can be better aligned so that local people see benefits themselves from an expanding neighbourhood.

The primary problem remains that the incentive is to take popular decisions now which yield to catastrophe further down the line. So it has happened with planning. Councils up and down the country are now reaping the consequences of their own actions. Local housing crises are causing chaos as young people stay with their parents for longer, move into smaller and more cramped accommodation, or move out of the area altogether. All of these situations hit council budgets. A 25 year old living with his or her parents does not increase the council tax bill of that household. A two-bedroom property expanded into a three-bedroom property may increase the council tax bill of the household if it pushes the property into the next valuation but it will be marginal. If the 25-year old moves out altogether the town hall sees not a penny.

The way Councils are trying to fix this? Not by building more homes, with new and improved design codes to limit local disapproval. Instead, they are aggressively targeting empty properties and second homeowners. Take South Hams council in Devon, which says in its policy that “the Council declared a Housing Crisis in September 2021 and by charging the Second Homes premium, we are encouraging council taxpayers to use a dwelling as their main residence or allow others to do the same.” Or Haringey, which says “the owners of long-term empty homes in Haringey will be forced to pay double their Council Tax bill one year earlier as part of action to help tackle the housing crisis.”

On empty homes this is more defensible at least in principle, although as others have pointed out, we have a far lower rate of vacancies than other European countries. But second homes? These are not properties that sit empty. These are genuine homes, lived in by people – often for large parts of the year. Their owners will often make significant contributions to the local economy, supporting a wide range of tourist based industries which wouldn’t survive without them. They likely use services significantly less than people who live in the area seven-days a week. Look again at what South Hams says is its motivation – “we are encouraging council taxpayers to use a dwelling as their main residence or allow others to do the same.” The message is clear: if you are a second home-owner we will price you out, or force you to move here permanently.

Bear in mind that Brits tend to own second homes at a far lower rate than our European counterparts – nine per cent here, 27 per cent in Spain. The message is absolutely crystal clear from town halls: people with the temerity to be affluent are going to have to pay for our failures.

Reform UK now controls three councils with council tax-setting powers. Two have the second-home premium – County Durham and West Northamptonshire – while one – North Northamptonshire – doesn’t. One of those premiums, I’m afraid, was Conservative-run. The challenge has now been posed: will Reform councillors reach for the easy, cosy, short-term solution of targeting the wealthy in the knowledge that it will sound good on the doorstep while allowing them to temporarily ignore the crux of the issue? Or will they be brave, and show they will genuinely run councils differently. And for those Conservatives still in charge of councils, can they show the courage of their convictions over the next 12 months, differentiate themselves from their opposing parties, and scrap these premiums wherever they are in place?