A Suffolk councillor who compared Southwold to Tolkien’s Shire has said new restrictions on faux holiday lets could boost funding for affordable homes.
David Beavan, Waveney District councillor for Southwold and Reydon, has reiterated his claim that “like The Shire, a dark cloud hangs over” his town – an ominous shadow, that is, cast by empty second homes.
Speaking to this newspaper this morning, he said: “The population has halved – you don’t really see children playing in the streets anymore.”
His qualm, he explained, lies not with second home owners themselves – but the way that some people claim to operate as a holiday let business, slashing their council tax payments.
Mr Beavan argued that closing this tax loophole, and banning new purpose-built second homes, could pump much needed funds into projects to build affordable housing.
To qualify as a holiday let there is no requirement to be let out to tourists - only “available to let” for 140 days a year – which could mean as little as a window advert.
And as long as the property’s rateable value is less than £12,000, owners can get 100% rate relief - meaning they pay no tax on it.
“If you say you’re a business, you can register as a business to pay business rates,” Mr Beavan said.
“[But] If you are smaller than a business then you get 100% rate release, so you pay neither business rates nor council tax.
“I went round in June and you can see those claiming to be a business, and 80% of them were empty.
“It’s probably costing us about half a million a year.”
Although the tactic is not illegal, it may be viewed as abuse of a tax loophole.
Mr Beavan said that some of the money could be saved by incorporating a new rule into the neighbourhood plan, stating that “any new build must be for local residents” – similar to a scheme currently in place in Cornwall.
The savings could then be spent on “affordable homes for the local people so they can afford to live here”.
In Southwold, Mr Beavan found 354 small businesses were claiming relief last year, of which 263 were second home holiday lets. All the second home businesses were claimed to have qualified for rate relief, amounting to £551,744.
Separate research by the EADT found 190 of the 387 businesses registered in Aldeburgh’s IP15 post code area were holiday lets.
When asked about his vision for Southwold, Mr Beavan said he was keen to attract young people with new ideas in an effort to bring a new lease of life to the town.
“We don’t want to go back in time,” he said. “We want to encourage young families here. We want to diversify the economy.
“We value tourism, but it would be nice to have some new industries.”
If nothing is done to fill the empty homes in Southwold, Mr Beavan painted a rather bleak picture for the town.
“If they keep increasing, there is going to be no Southwold left,” he said. “It is going to end up as a facade.”
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