Calls for restrictions on holiday homes in Cornwall
The Joseph Rowntree Foundation has suggested restrictions in rural markets to tackle housing crisis
A charity has suggested that restrictions on property purchases made by investors in certain locations should be considered to tackle deep problems within the housing system.
Scenic rural locations where there is high demand for holiday homes or rundown neighbourhoods where there are high concentrations of buy-to-let properties could be among the places considered for legal restrictions on who can buy housing stock, the Joseph Rowntree Foundation (JRF) suggested.
Tighter mortgage conditions risk the creation of a cash buyers' market, whereby those with existing capital are able to swoop in and buy properties to let, the JRF argued.
Meanwhile, renters have been coping with worsening affordability and face rapidly rising rents and other costs, alongside restricted social security support, it added.
A new report from the JRF said: "The sheer scale of house price inflation in recent years, on top of entrenched assumptions that prices will always rise, means that the current market downturn is unlikely to reset prices to more affordable levels.
"Instead, market stagnation is the most likely path for the next few years. This is likely to make those who are currently locked out of or struggling to cope in the housing market even worse off, risk serious consequences for the wider economy, and cause long-term scarring of our ability to build enough of the right homes."
The JRF, which works to tackle poverty, called for structural changes to make the housing system "fairer" in the longer term.
It said the Government should consider replacing council tax and stamp duty with an annual property tax paid by the owner rather than the resident.
Councils should also be able to apply to declare "housing pressure zones", where they can set the rules about who can buy properties in particular areas. This could be used to restrict investor activity, the JRF suggested.
Its report said: "Property ownership in some places - especially very high demand and very low demand markets - is now so dominated by investor interests that local people looking for a home to live in have effectively been frozen out of the local market."
The document said that in the longer term the Government should give "local councils the powers they need to impose legal restrictions on who can buy stock in defined areas of particular pressure - which could be due to high demand for second homes, low demand fuelling exploitative lets or regeneration zones attracting speculative buyers".
Rules could be tailored to local circumstances, the report suggested.
"It would be great for cash from second homes to be reinvested into housing associations"
We spoke to MP for North Cornwall Scott Mann, who said: "The Government are doing a consultation about new build properties and whether they should be main residency first.
"For me in Cornwall, I want to build houses for people that live and work in our community - all of the think that the Joseph Rowntree Foundation allude to in their report.
"I'm excited about that - because it's on message for what we're trying to do in Government.
"Here in Cornwall, we have a great track record in being able to provide affordable housing, but that's not to say there's more we can do. I'm a great advocate for community land trusts and rural housing associations building for local people. It's not policy at the moment, but it would be great if some of the second homes cash could be reinvested to help local communities in this way.
"However, if we build new builds for a second homes market, that's not really what our housing market is intended for in places like Cornwall.
"We want to meet the needs of local people - and we can effectively do that with the things that have been proposed in our Levelling-Up bill, and I'm delighted to say the Foundation are already pointing to some of the things happening in Government."
Renters are struggling, and house-buyers can't get onto the market
Toby Lloyd, an author of the report, said: "House prices have been far too high for decades - pushing homeownership out of reach, distorting our economy, and making it harder to provide affordable homes to rent."
Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), said: "Renters are struggling because there are not enough homes to rent.
"Increasing stamp duty on the provision of the very homes we need would only deepen this supply crisis. It would add further pressure to rents and make saving for a deposit even harder for renters who want to become homeowners.
"It is time the Government accepted calls by the NRLA, the cross-party Housing Select Committee and others for tax measures to encourage the supply of homes to rent."
A Government spokesperson said: "Increasing the number of high-quality affordable homes is central to our levelling-up mission.
"Since 2010 we have delivered over 632,000 affordable homes in England, including over 162,000 for social rent. But there is much more to do and that is why we're investing £11.5 billion to build more of the affordable, quality homes this country needs.
"We are already taking action to combat the adverse impact that second homes can have on local communities - particularly in tourist areas - by closing tax loopholes, introducing higher rates of stamp duty and empowering councils to apply a tax premium of up to 100% on second homes."