Revenue from second homes tax proposed to fund new affordable housing

A tax imposed on the owners of second homes could be utilized to finance “community-led” affordable housing initiatives. Proposals to allocate an annual sum of £1m from these revenues are scheduled for discussion by North Yorkshire councillors next week. Should the motion be approved, this amount would contribute to the provision of affordable residences in the region’s rural and coastal localities. North Yorkshire Council stated its existing “commitment to using some of the £12m estimated to be generated annually by the second homes tax on housing initiatives”. Earlier in the year, the council passed a vote to endorse a new 100% premium on council tax bills for second homes within the county, set to be implemented starting April 2025. This decision followed concerns regarding the cost and supply of properties in towns like Whitby, areas characterized by a significant presence of second homes and holiday rentals. The authority indicated that the initial Community Housing Fund government grant, which was intended to support affordable housebuilding and granted in 2016, has now been fully utilized. Within North Yorkshire, the count of “community-led” housing groups has increased from nine to 24, possessing the capacity to provide over 120 homes. While these groups spearhead the creation and oversight of affordable properties, they lost access to specific grant funding after the Community Housing Fund concluded. Financial assistance is necessary for these groups to establish a project and navigate it through the planning stages. The council proposed that entities like parish councils or “like-minded people” could oversee a project, either by developing a housing site independently or collaborating with a housing association for its management. These groups would have the discretion to determine the tenure type, size, and allocation policies for the residences, and generate revenue from them. Councillor Simon Myers, the executive member for housing, stated: “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 further indicated its intention to collaborate with registered housing providers and Homes England, encouraging their joint efforts to provide guidance and assistance to community-led groups.