How demand for second homes in Thanet highlights flawed housing policy

The much-heralded revival of Margate has helped increase demand for second homes in Thanet

The ridiculous housebuilding targets imposed by Whitehall on our local authorities have been well charted, but few places highlight some of the inherent issues as much as Thanet.
Always something of a law unto itself, the district suffers a low-income, low-skills economy, with socio-economic stats that compare to the worst in the country, let alone the South East.
Alongside this, however, are property prices that, while still low in a regional context, are in truth eye-wateringly high. Many local people are not able to even consider buying a home.
This, of course, is presented by the government as a central tenet of its increased housing targets; it is saying house prices are too high for local people so we must build more.
It’s a simplistic argument that might be better suited to a school playground than the national political arena: houses are not tins of baked beans and simply putting up more of them is not going to bring a fall in prices.
A range of variable factors determines house prices.
Of course, in Kent one of those is proximity to London (another law unto itself, indeed almost another country in some regards).
Much of this county (widely regarded as the poor sister of the South East) has similar issues to Thanet, if to a lesser degree, in that local wages are never going to compete with those of London.
Even allowing for workers who commute to the capital for employment, too many Kent residents are priced out of housing by incoming Londoners. Building more houses isn’t going to affect prices if they’re simply going to be bought by people from the capital.
In Thanet, the situation is exacerbated by the number of properties bought as second homes.
Staggeringly, HM Revenues and Customs figures reveal that in 2017-18 more than a quarter (28 per cent) of residential properties bought in Thanet were procured as second homes.
The second-highest figure came from Canterbury, at 24 per cent, followed by Dover and Folkestone & Hythe (each 22 per cent). The least-affected district was Tonbridge & Malling at 15 per cent.
Increased stamp duty was expected to reduce the demand for second homes, but instead Kent saw a rise of 16 per cent in their purchase from 1916-17.
Most South East local authorities will struggle to meet their housebuilding targets, which in itself will herald a tranche of other issues, but it is clear that housing policy and its attendant methodology are missing the target when it comes to providing local homes for local people.
Second-home purchase is just one factor in that mismatch.

Wednesday, January 16, 2019

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