Chancellor cannot rule out second home buyers in Devon and Cornwall getting state-backed mortgages
George Osborne is under pressure to rule out second home owners getting state-backed 95% mortgages under his flagship housing policy.
High levels of second home ownership cause huge resentment across Devon and Cornwall, with critics blaming part-time residents for forcing up house prices and undermining local services.
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George Osborne
The 's Budget on Wednesday revealed state loans for deposits and mortgage guarantees would help hundreds of thousands of first-time buyers and "second steppers". While the policy blocks buy-to-lets, it does not explicitly rule out would-be second home owners from taking advantage.
Today, Mr Osborne could not rule out support for second home owners when pressed on Radio 4's Today programme.
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There are around 26,000 holiday homes across Devon and Cornwall.
Councillor Alex Folkes, a Liberal Democrat who has campaigned to restrict second home ownership in Cornwall, said: "Liberal Democrats have worked hard in Cornwall to close the loopholes that give unfair advantages to second home owners. The council has ended the second home council tax discount and we want to make owners apply for change of use permission before they can turn a house into a second home. Liberal Democrats have made affordable homes for local people one of our top priorities. Cornwall cannot afford for Mr Osborne to undo all this hard work and so we need him to be clear that his new scheme will not subsidise second homes."
He added: "Yesterday's budget did a lot that is right for Cornwall. It extended the income tax threshold to £10,000 a year early - fulfilling a promise made on the front page of the Lib Dem manifesto. If provided much needed help with child care costs and provided a boost to the beer industry. It would be a shame if all this good work was overwhelmed in the public mind by an ill-defined policy on new homes."
Ed Balls MP, Labour’s Shadow Chancellor, said: "Not only is George Osborne pressing ahead with a tax cut for millionaires it now seems that his mortgage scheme will help people, no matter how high their income, to buy a subsidised second home worth up to £600,000.
"The Government is basically saying that if you’ve got a spare room in a social home you’ll have to pay the bedroom tax, but if you want a spare home we’ll help you buy one.
"Is the Government really going to give millionaires a tax cut averaging £100,000 and then give them a taxpayer guarantee if they use that money as a deposit on a house - a second home or even a home to buy to let? Not just tax cuts for millionaires but subsidised mortgages for millionaires.
"Surely people struggling to get a mortgage and those who want to own their first home must be the priority for help, not the small number who can afford to buy a second one. We will only tackle the housing crisis and help first time buyers if we finally build the new affordable homes we have said should be at the heart of any proper plan for jobs and growth.
"This more of the same Budget stuck with a plan that is completely failing on growth, living standards and the deficit, but the one new thing George Osborne announced is already unravelling."
12 Comments
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by Charlespk
Monday, March 25 2013, 10:36AM
“They are interest free loans (debt) for deposits, secured by the property purchased; not state backed mortgages. . They will not be a guarantee guarantee against the possibility of any future negative equity. . The main thing that's holding the market back. (IMO)”
by Charlespk
Monday, March 25 2013, 10:27AM
“Until there's a house price 'correction' nothing will change. . Only two things with cause that correction. . 1. Much higher general inflation (Prices AND Wages), so the number (house sale prices) stay the same give or take, but the REAL values fall markedly.
OR 2. A return to Base Rate at the current inflation level so forcing mortgage default, negative equity and property being returned to the market for sale by auction.(very painful). . House builders will never deliberately undermine the value of their vast Land-Banks
IMO, higher inflation is the only thing that will bring the massive equity held in real-estate (property) back into the general economy and start to stimulate general commerce and real growth again any time soon. (Devaluation by any other name.)
The alternative is this painfully slow recovery that is just protecting the lenders who still pay themselves large bonuses.
We've been here before, so have many of the countries on the Pacific Rim like Japan, Taiwan and the Philippines; only this time we've got the added corrosive cost of rocketing energy prices.
The new Bank of England Chairman may have similar ideas, but he won't be as forthright.
Ed Miliband's latest ranting about a 'Lost Decade' (that he and all his cronies caused) is what Japan suffered. . The alternative is, biting the bullet and getting stuck in as if it was wartime. The challenge is as great and we have as much to lose as Cyprus is currently demonstrating.”
by PaddyTrembath
Sunday, March 24 2013, 10:38PM
“Charlespk wrote:-
"Mr Prisk said: "You would first have to divest your existing property prior to being able to proceed with any Help-to-Buy sale. This is about family homes. It is not about second homes. We do have details in there about making sure there is a legal declaration through a solicitor before someone can take on a purchase that they have got rid of their exiting property.""
So, no evidence re Second "Home" buyers buying with capital then.
The problem with the insistence on there having to be a legal declaration that the intending purchaser has to provide is that this does still not stop the purchase being made in the other partners name. Thus leaving the way open for a couple to be able to take advantage of this scheme.....................................Not quite as Second "Home" proof as you make out.”
by Charlespk
Saturday, March 23 2013, 8:56PM
“Mr Prisk said: "You would first have to divest your existing property prior to being able to proceed with any Help-to-Buy sale. This is about family homes. It is not about second homes. We do have details in there about making sure there is a legal declaration through a solicitor before someone can take on a purchase that they have got rid of their exiting property."”
by PaddyTrembath
Saturday, March 23 2013, 12:02AM
“Charlespk, got that evidence yet?”
by Big_Ger
Friday, March 22 2013, 9:26AM
“"Councillor Alex Folkes, a Liberal Democrat who has campaigned to restrict second home ownership in Cornwall,"
Maybe if everyone paid their council tax we'd have sufficient funds in the county council coffers to support affordable homes Alex, hint hint!”
by PaddyTrembath
Thursday, March 21 2013, 11:36PM
“Charlespk wrote:-
"This is a scheme to stimulate new house building. . It's unlikely to be of particular interest second home buyers who mostly invest capital."
Evidence of this please?
The "invest capital" bit is the red herring, some do, but most do not. It is a far better return over a period of 25 years, to borrow the money to buy, use your capital elsewhere, and at the end of the mortgage, you will have made far more money from the value of the property, even with paying the interest on a mortgage, and still have had the capital to invest in other things, making even more money.”
by Charlespk
Thursday, March 21 2013, 7:27PM
“Once again we have hysterical scaremongering from the lunatic left.”
by Charlespk
Thursday, March 21 2013, 3:42PM
“Red Herring.
This is a scheme to stimulate new house building. . It's unlikely to be of particular interest second home buyers who mostly invest capital.”
by josdave
Thursday, March 21 2013, 3:24PM
“It is quite simple to make sure that only first time buyers get some help in this way so why make it ambiguous? Could it be to give would be second home owners a better chance of turning more of our coastal towns and villages into ghost towns?”