Number of second homes skyrocketed in Burnley

The number of second homes and houses bought to let in Burnley has skyrocketed since last year, despite new taxes on additional properties.

Friday, 5th October 2018, 2:38 pm
Updated Saturday, 6th October 2018, 6:29 am
Second homes are on the increase in Burnley

HMRC figures show the buy-to-let market has bounced back in Burnley, with second home ownership seeing the biggest spike across England, Wales and Northern Ireland.

A second home is defined by HMRC as a property that is bought by buyers who already have primary residences.

That means second home buyers include property investors and landlords buying houses to rent out.

Around 460 second homes were bought in the area in the financial year 2017-18, with a combined value of £44 million.

That's an increase of 59% since 2016-17, when 290 were bought.

Last year almost 30% of properties sold in Burnley were classified as second homes.

That's despite an extra 3% stamp duty charge on additional properties, introduced in April 2016 as part of a government effort to deter buy-to-let landlords, property investors and second home owners.

In England, 232,000 second homes were bought, with an estimated value of more than £70 billion.

That's an increase of 19% since 2016-17, when 195,000 were bought.

The National Housing Federation, which represents housing associations, said it was concerned about the impact that buying extra properties has on local communities.

Policy leader Will Jeffwitz said: "In any community, if more homes are bought up as second homes then there are fewer available for residents - and the houses left are more unaffordable."

He added: "If families and young people are priced out of their local communities it can have a hugely demanding impact on community life - with village shops, schools and pubs closing in alarming numbers as a result."

The NHF praised the Government for reducing stamp duty for first time buyers, but urged that more investment was needed in social housing.

Mr Jeffwitz said: "Our solution is that there should be a renewed focus on building more affordable housing, which reduces the impact of a high ownership of second homes."

Lawrence Bowles, research analyst at estate agent Savills, said that there was a "sharp spike" in second home purchases in March 2016, as buy-to-let investors rushed to avoid the new tax.

He said: "The numbers are partially a reflection of subdued activity returning to normal, rather than a huge upswing in investor demand."

But Mr Bowles said that first-time buyers are still at a "fundamental disadvantage", despite the new tax.

He said: "First time buyers will typically be buying with a mortgage, and buy-to-let landlords will often have the money in their account, ready to go.

"Sellers prefer that over mortgages because of the certainty - there's always a risk associated with a mortgage."

In total, around £2m. was collected from stamp duty in Burnley last year.

HMRC figures say that duty on additional dwellings made up 70% of that amount.

The Treasury said that the Government's priority is to "support first time buyers".

A Treasury spokesman said: "We want to support the dream of home ownership for the next generation.

"Higher rates of stamp duty on second homes means we can afford to offer more support to first time buyers through the stamp duty relief."