The story goes national under the headlines: “Millionaire hotspot Salcombe blocks second home buyers” (Telegraph) and “Salcombe pulls up drawbridge against the second-home invasion” (Times).
The Times, however, explains the intricacies of using “Section 106” agreements to ensure the concept of “principal residence” endures. (Planning officers more often chose to use planning conditions because they caused “less hassle”, but the Council wants to remove this option).
Salcombe pulls up drawbridge against the second-home invasion
Will Humphries, Southwest Correspondent www.thetimes.co.uk
Some people will do anything for their own slice of the seaside idyll. Even if it means bending or breaking a few planning rules along the way.
The people of Salcombe, the Devon seaside town nicknamed Chelsea-on-Sea, have become so worried about the influx of second-home owners that they have enacted the strictest code against out-of-towners in the country.
In 2018 the neighbourhood planning steering group calculated that about 57 per cent of homes in the town were second homes. South Hams district council is hoping to curb this trend by making it a legal requirement that all newbuild homes be sold as a principal residence and stay that way for ever.
In the past, planning officers had the choice to attach a planning condition to a new development, stating it must be a principal residence, or draw up a Section 106 agreement with the developer, which makes it legally binding on the property’s title deeds.
Judy Pearce, Conservative leader of South Hams district council, said that planning officers more often chose to use planning conditions instead of Section 106 agreements because they caused “less hassle”.
She said that because planning conditions were not registered on the property deeds, unlike a Section 106, they often get “lost or overlooked” by homeowners and lawyers during house sales.
This allowed properties first bought as a principal residence to be sold on years later and added to the growing list of second homes.
“Particularly in the case of Salcombe, where people will do almost anything to get hold of a property,” Pearce said. “I am not saying people do cut corners but if you were of the mind to, it would be easy [to overlook a planning condition].”
The council has now voted to ensure that its neighbourhood plan demands all new developments, excluding replacement dwellings, must have a Section 106 agreement stating it will remain a principal residence in perpetuity.
“We had to take it to council because the planning officers wouldn’t sign it off,” Pearce said. “The officer who deals with neighbourhood plans agrees with us but the majority didn’t.”
Salcombe has long been a mecca for the boating fraternity. Wealthy out-of-towners arrive in the summer months to sail on the Kingsbridge estuary and moor up in sandy bays for lunch. The population can rise from about 2,000 during the winter to more than ten times that in summer. The closest railway station is a 40-minute drive away in Totnes and trains to London take about three hours.
The new neighbourhood plan amendment will be assessed by an independent examiner before it is officially approved as part of the planning framework for Salcombe. Nikki Turton, the town mayor, said that the blanket use of Section 106 agreements would ensure the town “doesn’t need to keep an eye on every property and report constantly on possible breaches”. She added: “We want families to come and live and work here. We are not just a holiday destination, we are a thriving town and we want to exist in the future.”
The average wage in Salcombe is below the national average but the cost of buying a home is about £750,000, with a majority selling for well over £1 million.
Blair Stewart, a local estate agent with Strutt & Parker, said that there “have been instances” of planning conditions being avoided during house sales. “It’s not rocket science that clever solicitors and lawyers will find ways and means of getting around things,” he said. He believes the new rule will cause “quite a significant issue” for people looking at new developments, which typically cost between £800,000 and £1.5 million, if they have to commit themselves to making it their principal residence.
“It is the significant upper end of the market, which tends to be new developments. There are virtually no affordable homes in Salcombe,” Stewart said.
Property values in and around Salcombe have risen by 10 to 15 per cent in the past year. Stewart said that he had seen a 30 per cent rise in buyers coming to live full-time in Salcombe in the past five years, with draws including Ofsted-rated outstanding primary and secondary schools and improved wifi coverage. “It helps that the head of BT has a house in Salcombe and sorted that out,” Stewart said.
An idea that is catching on
Salcombe is not the first seaside town to move to tighten its planning rules.
St Ives voted to ban the selling of newbuild properties as second homes in 2016, and has been followed by other Cornish tourist hotspots such as Fowey and Mevagissey.
These towns have passed neighbourhood plans stipulating planning conditions that newbuild properties must be sold as principal residences.
However, none of them has gone as far as Salcombe, which is looking to dictate that only a Section 106 agreement attached to the title deeds can be used.
Since St Ives voted for its neighbourhood plan there has been much debate about whether it will have the desired effect of making more affordable properties available to local families. Some estate agents insist that the regulation is hampering supply.
A London School of Economics study published in 2019 said that the policy had led to an increase in the price of existing homes because prospective second-home owners were competing for them with residents. Professor Christian Hilber, who led the study, said a better option would be a local annual tax on the value of a second home.
Councillors have said that it is too early to judge the merits of the policy. However, before the pandemic the average property price had risen 3 per cent since 2016. At times in the past decade prices were growing by more than 10 per cent a year.