Second homes

The lovely county of Gwynedd has been in the news for reasons other than its beauty.  It made the BBC, Guardian (Rowan Moore column), Mail (for policy reasons, I don’t link to this outlet) and Telegraph.  The reason for this interest was headline figures from the Principality Building Society’s house price index for the last quarter of 2024, published here.  This is based on land registry data, compiled by a firm called Acadata.  Gwynedd’s house prices were said to have fallen by 12.4% on this index during that quarter.

More precisely, this was because columnists and others were able to comment on Gwynedd’s policy on second homes.  That is to say, it charges higher council tax on second homes and requires planning permission to be obtained before turning residential property into a second or holiday home – an Article 4 direction (links to Gwynedd’s Art 4 designation).  The BBC had various local homeowners bemoaning the effects of these policies on their planned sales.  An application for a JR of the scheme did not get permission because, apparently, the council “had made the decision following a ‘robust and thorough exercise’, invalidating the group’s grounds for challenge”.

Now, I have to say that there are reasons to be sceptical about this reading of the data.  The first is that it involves quite a selective reading of the dataset which is produced by an organisation which has an interest in booseterism.  For example, if you compare Anglesey (say) which has a council tax uplift (as most do) for second homes of 175%, there were price increases.  It is unclear how one can read this data so as to isolate Article 4 from other external effects.  Secondly, the Article 4 designation only came in to effect on September 1st 2024.  One would think, therefore, that this would be a remarkably quick impact on house prices.  Thirdly, as the redoubtable (and my go to commentator on Bluesky) Anna Clarke put it,

“BBC getting over-excited by shoddy data here. Land Registry data shows there were 82 property sales in Gwynedd in the whole of 2023-24, so you can’t really say anything about house prices from changes from just one quarter’s data.”

In summary, it’s too early to write home about the effects of second home policy.  And, one might say, if they were dampening house prices to that effect, that would be regarded as a policy success in any event (cf the Telegraph’s “botched” headline) because that may be what the policy was actually intended to do.  This might be one of those rare cases where policy-makers actually achieve what they wanted.  But, whatever – it’s far too early to say yet.