In areas with high levels of second home ownership, there have been moves to seek to include a ‘Primary Residence’ restriction through the imposition of a 106 obligation on all new and replacement dwellings constructed in an area.
An example of such an area is Salcombe in Devon where it is claimed that 57% of dwellings are second homes, and the measure is being introduced as policy via the Neighbourhood Plan. The stated aim of the policy is to seek to restrict the number of second homes and to allow local people to have access to local property in the local market, and to secure the long term sustainability of the town.
One slight flaw in the argument is the fact that the current average house price in the area is at least 12 times average earnings.
The first question I would pose is whether the restriction achieves its stated purpose?
One of the first restrictions was imposed in St Ives Cornwall around three years ago. Development has proceeded in St Ives, but this is largely the implementation of planning consents that were obtained prior to the restriction being imposed. There appears to be little appetite for new development which will have the restriction applied.
An ancillary effect of the policy is that the prices of existing dwellings without a restriction in place have increased and led to an increase in prices across the whole market.
It is acknowledged by the planners in Cornwall, that the imposition of such a restriction has a clear effect on the viability of schemes. The planners advise that the restriction has unsurprisingly resulted in a reduction of the amount of affordable housing being offered, and a reduction in CIL banding for the area.