The Labour-led Government in Wales has recently granted approval for powers to significantly increase council tax on second homes starting from April of this year. Under this decision, the tax could rise by as much as 300 percent.
A similar proposal is currently being considered in England, where Michael Gove’s department is consulting on the possibility of introducing an annual fee for individuals with second homes. Experts suggest that this fee could be as high as £1,000.
During a recent statement, Mr. Gove stated, “The housing system rightfully favors first-time buyers. However, there is still more we can do and more initiatives will be introduced. Our plan is to extend the opportunities available to British first-time buyers by prioritizing them over individuals with multiple properties, those converting family homes into holiday rentals, and speculative buyers who solely aim to inflate property prices.”
Previously, the government has introduced state-backed schemes to assist renters in becoming homeowners. The Help to Buy equity loan scheme, for instance, was launched in 2013 and enabled people to purchase newly-built properties with only a 5 percent deposit. Although this scheme was phased out earlier this year, it successfully helped 328,242 first-time buyers secure homes. The government has not yet announced a replacement for this program.
Critics argue that the Help to Buy scheme contributed to inflated prices for new-build homes, making them unaffordable in certain areas. Nonetheless, other schemes, such as Right to Buy and shared ownership, continue to provide alternative paths to homeownership for council tenants and aspiring buyers.
The Telegraph has reached out to the Department for Levelling Up, Housing, and Communities, as well as the Treasury, for their comments on these developments.
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