Second Homes. Research Paper 6: DRAFT. November 2004 Author: James Thorburn

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1 DRAFT Research Paper 6: Second Homes November 2004 Author: James Thorburn Research and Information Ceredigion County Council DESH Penmorfa Aberaeron SA46 0PA

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3 CONTENTS SECOND HOMES... 2 Historical Context... 2 Second Homes in Ceredigion... 5 Local Patterns of Second Home Ownership in Ceredigion Local Trends in Second Homes Numbers Second Homes and the Local Housing Market Implications for Housing and Other Public Policy Areas Prospects for Second Home Ownership References Appendix CSC R&I 1 11/8/2004

4 SECOND HOMES Second homes have been identified as a particular pressure on local housing markets in rural Wales and as such the subject has attracted the attention of policy researchers. Interest in the issue was probably stronger in the 1980s when it appeared that numbers of second homes were growing. This report attempts a synthesis of recent evidence on the local situation and wider context of the issue. The paper is arranged into the following sections: The historical context of second homes in rural Wales The various definitions of second homes and the difficulties these have for assessing past information on numbers Data from the main surveys and counts over the past 30 years The second home market in Ceredigion in its Welsh context using the most recent data The nature of recent trends in second homes in Wales The position of second homes in local housing markets The implications for areas of public policy Prospects for future second home ownership in Ceredigion Historical Context The idea of the second home as an area of interest for public policy is a product primarily of the second half of the 20 th C. Until WWII ownership of second homes was usually confined to wealthy and moderately wealthy families in the UK. However, increased mobility and disposable wealth extended ownership to a wider group in 1950s and 1960s In this respect the UK is significantly different from other areas of Europe where large scale moves from rural to urban areas have taken place in the post WWII generations. Family ties between town and country were therefore preserved with families maintaining rural residences for vacation in their home communities, a practice which continues although familial ties are now looser. In the UK early industrialisation removed the link between urban and rural, polarising the two spheres economically and culturally. Furthermore in a more crowded land, particularly in England and Wales, post-wwii planning restrictions have been universally adopted and enforced leading to conflicts between demand from different groups for housing in some locations. These conflicts have generally been exacerbated not only by the cultural differences between second home owners and other groups, but by the general perception of great differences in personal wealth between leisure second owners, and the incomes and capital of people living in areas which, although scenically attractive, have generally provided fewer economic opportunities. Rural Wales in the post WWII period presented classic conditions for growth in leisure second homes. Attractive coastal locations and inland landscapes. CSC R&I 2 11/8/2004

5 A relatively plentiful supply of cheap housing stock following a sustained period of rural depopulation and abandonment. Such housing stock was often in dilapidated repair. In some areas such as the former quarrying towns and villages of Caernarfon and Meirionydd concentration of cheap housing was available within areas of natural beauty. These low prices were relatively affordable for families who were not particularly wealthy. These areas were relatively accessible from the large conurbations of NW England, the West Midlands and South Wales. This access now extended to the less wealthy as car ownership rose and road improvements reduced travel times. Despite this geographical proximity these areas also offered a distinctly different culture There appears to have been little early comment on the growth of second homes except as benefit to the individuals involved and as a method by which otherwise unwanted housing was saved from dereliction. The 1964 Beacham Report (Welsh Office, 1964) made some note of recent rise in mobility and the fact that a number of scattered cottages in a wide area of rural Mid-Wales had been acquired (generally for under 500) and partially modernised for use as weekend or holiday cottages. By the 1970s and 1980s perceptions had changed and second homes were increasingly seen as a policy issue. In general this appears to have arisen from: The repopulation of rural areas increased the demand for housing in rural Wales from a range of sources. The supply of cheap property in remote locations, which had been unattractive to buyers seeking permanent residence, had been used up and purchases were moving into locations in villages and small towns where their impact on the local community was more visible. Physical and financial access continued to grow potentially extending second home ownership to a greater number of people. Following the formation of Cymdeithas yr Iaith in 1963 more attention was focussed on the decline of Welsh and in particular its relationship to a geographical area, y Fro Cymraeg, which coincided with those areas of greatest second home ownership and where demographic change was, therefore, seen as one of the factors contributing to a decline in Welsh speakers in terms of numbers and proportion. A series of reports were produced in the 1970s and 1980s on the nature of second homes, their effect on local communities and possible regulatory instruments to address these problems. In general these reports confirmed that second home ownership was not generally significant in Wales, but was concentrated in several areas in the west of the country, mainly coastal but in some inland areas, where it could be seen as a potential social and cultural problem. Most of the reports prepared by local authorities conceded that second home ownership had benefits to the local economies and societies as well as costs. Among these benefits were economic benefit from actual acquisition and maintenance such as the immediate capital injection on purchase and renovation, and the on-going purchase of maintenance and other local services. The benefit analysis also included the purchase of other local goods and services, even if these were not comparable to the purchases of a permanently resident household. In addition it was acknowledged that second home purchases had rescued many dwellings from dereliction and loss, and improved the general housing stock. Some mention CSC R&I 3 11/8/2004

6 might also be made of the increase in demand for better quality services in tourism and local amenities. However, most reports rather chose to concentrate on the costs to the local society and economy, which can be summarised as: An economic cost to local businesses compared to the loss of potential spending were the second residence permanently occupied. Second homes represented an additional demand in local housing markets which led to higher house prices, meaning that they became beyond the range of local purchasers, but were still affordable by purchasers from outside the local area. Higher priced housing in turn leads to further out-migration by young people who cannot afford housing and makes local communities less sustainable. The socio-linguistic cost is to erode local community values and particularly to erode Welsh-speaking communities, whose heartlands are the areas where second homes are most prevalent. Second homes are the prelude to more permanent residence in the second home on retirement which would be more injurious to the state of the Welsh language in these areas than the part time occupancy of second homes. Again, although many of these assertions were made without supporting evidence and appear contradictory, they could be seen as reasonable assumptions that could be tested over time. In general the same cost/benefit analysis could be applied to rural and coastal areas throughout the UK. Indeed many areas in England were probably experiencing greater economic and social pressure than seen in Wales. There was a general agreement between local authorities that second homes were on balance a problem whose costs outweighed any benefits. Considering both their own research and reports from interest groups local authorities made representations to the Welsh Office asking that changes be made to existing legislation or that new legislation be introduced to address the problems. Broadly the suggested measures fell into the following groups. Planning policy: the use of order classes to make second homes a different class of use from residential and therefore bring them under planning control; the use of special conditions on new build to prohibit its use as second homes. Housing Finance: These were measures designed to help local residents access housing in general through increasing social housing or helping purchasers rather addressing second homes directly. Regulation: measures such as licensing and registration of second residences to bring them under special legislative control. Such measures were said to be comparable to those used in the Channel Isles and Isle of Man. Most recently the Welsh Assembly Government has commissioned work from the Bartlett School of Planning, UCL, which attempts to quantify and describe trends in second home numbers and ownership, relate them to issues of public policy and produce policy recommendations. Since this paper is the most recent and comprehensive research carried out for public policy purposes, the paper contains a critical review of the report, its data, analysis and conclusions. CSC R&I 4 11/8/2004

7 Second Homes in Ceredigion Definitions and Counts of Second Homes Any attempt to quantify even the most basic data such as the number of second homes in Ceredigion is beset by problems of definitions and data availability. The problem of definition is crucial; in the broadest sense the term could be taken to mean any ownership of more than one residence by a household. This could therefore cover a range of situations from a couple maintaining two separate residences, a family member occupying, owning or renting a separate residence nearer a work location or outside the UK, families in the process of break-up or moving, etc. The term is usually taken to imply some form of leisure use and ownership, that is a second home is taken to be a dwelling owned by a household in addition to another dwelling which serves as a usual residence, and which is occupied less frequently than the main residence, perhaps particularly at times of vacation and holiday. The term second home used in this way has something in common with the term holiday home, although the latter is usually taken to mean a dwelling let for leisure on a commercial basis. Obviously there may be considerable overlap between the two terms. The Bartlett report seems to prefer a definition based on the two terms holiday home and second home (Tewdwr-Jones 2003, p.15-16). In common usage the term is often taken to imply that the dwelling is owned by someone from outside the area, and that has in some cases been the basis of survey or measure, although it is then open as to what is meant by the area and other such terms. The main problem is that this apparently common sense meaning is not always easy to define. Most data sources usually depend on some element of subjective interpretation of external features during field survey (such as in the census counts), or on administrative distinctions which may cover a range of actual uses (such as Council Tax categories). It is obvious that the available data sources cover a range of other uses in addition to the primarily leisure-associated uses, and equally obvious that definitions have changed over time, for example between censuses, or in the various local rating list systems. A major additional problem locally in Ceredigion is the exclusion or inclusion of student households in the census counts and other surveys. Until 2001 Census counts of resident population usually excluded students from the definition, and generally counted student households as second residences. Similarly, it is uncertain how many non-main residences in Ceredigion are actually owned by Ceredigion residents. Some of these may have been differently identified by various surveys as either holiday homes, which to some people implies a local owner making commercial lets, or second homes, which might imply ownership by people from outside the area. However, there appears to be little evidence for making this distinction. A more basic question is whether in fact these various definitions rather than being mere technicalities reflect actual changes in the nature of second residences. There is some evidence that changing patterns of work, retirement, social and cultural attitudes and social and family networks collectively have worked to erode a simple view of second residences as the part-time leisure retreats of wealthier families engaged elsewhere during their working life. Number of Second Homes in Ceredigion 1971 to 2004 A look at the evidence for the number of second homes in Ceredigion and the former Cardiganshire will illustrate these problems. CSC R&I 5 11/8/2004

8 As noted above, there was apparently little concern locally or nationally in the question of second homes until the 1970s and they were not counted separately in Census until the 1980s. The 1971 census included a count of absent households, but its definition and the count of usual resident population was such that these households included many other types of household such as students. The 1972 Cardiganshire County Council survey estimated some 1,354 second homes on the basis of a postal survey of rating list records with a billing address outside the county. A similar methodology was used in surveys and estimates produced by Dyfed County Council in 1978/79 and 1981/82. These reported an estimated 2,200 and 2,600 second homes, respectively. However, these totals also included some dwellings used as student accommodation and other rentals on a private basis where the owner lived outside the county. This is confirmed by the 1981 Census counts of 1,915 non-main residences in a definition which included a range of uses, including student accommodation and leisure uses. Despite including a separate category of student accommodation, the 1991 Census did not resolve the issue. Student houses, rather confusingly, were only considered as such if there were no persons present on Census night, otherwise they were included with other second residences. The 1991 Census counted 1,014 vacant second residences and 178 vacant holiday homes together with 672 occupied second residences or holiday homes, plus 178 student houses. However, given the low response in areas of private rented households and among students generally, and the fact that many students in private households would have been present in university areas at census time in the Easter vacation, it is not possible to have much confidence in the sub-classification of non-main residences or in the overall totals. The same reason must be used to question the enhanced 1991 counts of second residences presented by Tewdwr-Jones, who calculates a higher scenario of 1,786 second homes in Ceredigion based on 1991 Census. Local experience would tend to suggest that, whilst nationally there may be some basis for 1991 revising Census upwards, a truer figure of second homes for Ceredigion as a whole would tend to be lower than the 1991 second residence counts, due to the treatment of student accommodation. The Bartlett report also uses data from Council Tax returns for the period 1996/7 to 2000/01 (2001 Census data was not available to the project) to show more recent trends. As can be seen from Table xx, on this basis the number of second homes varied between 1,392 and 1,610 during this period. Tewdwr-Jones quotes a higher scenario series for these years based on the possibility of under count in Council Tax returns due to owners claiming rural residences as their primary residence. However, we see little evidence to support the 16% enhancement to figures locally; the local revenues manager has discounted such a large inflation of second home numbers in Ceredigion Council Tax classifications. Rather than taking the authors leap of faith, we would, therefore, be more comfortable accepting the standard scenario Council Tax figures as a closer approximation. There are in addition a number of problems with the data presented by Tewdwr-Jones which are further discussed in Appendix I. The 2001 Census includes a single table on occupation type counting only unoccupied household spaces as being divided between vacant household spaces, and a category of second residence/holiday accommodation, which in Ceredigion numbered some 962 household spaces. There has been some criticism that the 2001 Census failed to distinguish a usually resident population (and by extension a usually resident household), and how it groups together holiday accommodation and second residences. This, however, can be seen both as an CSC R&I 6 11/8/2004

9 acknowledgement of the practical difficulties of counting and of the changing nature of society. The decennial Census is primarily a count of persons rather than buildings, and decisions about the use of unoccupied buildings have always been fairly subjective based on location, appearance, and so on. More basically, the 2001 Census definition of population and households is recognition of the increased mobility of society; it is has simply become more difficult to define what is a usual residence and the term is increasingly redundant. Table 1. Recent Data Sources for Numbers of Second Homes in Ceredigion (including data after Tewdwr-Jones). Standard Figures Tewdewr-Jones Higher Scenario (enhanced by 16%) Council Tax 1996/ CT 1997/ CT 1998/ CT 1999/ CT 2000/ Census Census 962 CT (incl. 200 chalets) Trying to reconcile data covered by these various definitions and methodologies is a difficult task. Although we can compare Ceredigion with other Welsh authorities, it is difficult to arrive at certain figure for leisure second homes in Ceredigion county even in recent times and more difficult when facing data from a variety of older sources. We can perhaps accept, on the basis of Census and Council Tax data, that the total figure of second homes in 2001 was somewhere between 1,000 and 1,500 dwellings or between 3% and 5% of the total housing stock. More recent Council Tax data shows that the total number counted on that basis, 1200, remains at or below the general rate of recent years. The recent levels, therefore, represent a total number around the same level as in the 1970s, but obviously forming a lower proportion of the total housing stock. Although it is not possible to make a direct comparison, the present level would certainly appear to be below the figures obtained by postal survey in the 1980s which probably represented a high point of second home numbers. Second Home Definitions and Counts: Summary Despite a commonly accepted idea of second homes in rural Wales as being properties owned by outsiders and used for occasional leisure use, this definition does not match any of the available data on numbers or distribution of non-main residences. CSC R&I 7 11/8/2004

10 Data sources vary greatly in definitions and counting methods. It is not easy to reconcile the counts made from local rating lists and surveys and they appear to have used a very broad definition of second homes. It might be supposed that census counts would provide a more consistent count, but again these data appear to have used a number of overlapping definitions and counting methods. Locally in Ceredigion, the presence of student households greatly affects census counts, and in some counts student households may have been included in the classes of second homes and holiday homes making comparison difficult. Although it is impossible to completely reconcile the available historical data, they would appear to indicate that second homes numbers (on the broad definition) in Ceredigion rose from about 1,400 in the early 1970s to a peak of about 2,600 in the mid-1980s, and appear to have declined since. In 1991 the total appears to have been around 1,500. By the 2001 Census the total number of dwellings in Ceredigion used as non-main residences would appear to be between 1,000 and 1,500, although it is impossible to say how many of these properties correspond to the accepted idea of second homes. Recent data from 2004 Council Tax lists show that a Section 12 discount is claimed on some 1,200 dwellings plus an additional 200 chalets. Comparison of Ceredigion and Wales If it is difficult to produce a consistent measure over time, the comparison of geographical areas within the same dataset is more successful. Tewdwr-Jones, for example, has produced a series of data on both unitary authority and electoral ward basis to show the geographical distribution of second homes in Wales (see Tewdwr-Jones Figs 3.1 to 3.5). In general the locations of areas with significant numbers or proportions of second homes are well known. These include the main northern and western coastal areas, from the Gower to Conwy, and the mountain areas of north-west Wales. As outlined above, historically these areas combined areas of attractive landscape (natural and man-made) with relatively cheap housing in more isolated locations. The main areas, Gwynedd and Pembrokeshire, were also relatively accessible through the trunk road system from the major conurbations which meant so they were located at a point, close enough for reasonable travel for short stay, but far enough removed to mark a real difference from the home area. From the available data Ceredigion would appear a relatively less desirable location than the adjacent areas to the north and south. Firstly, scenically the area is less obviously attractive. It is perhaps only south of New Quay that the coast approaches the character of the Pembrokeshire coast, both in the succession of small bays and coves, and in the location of coastal villages, whilst, with the exception of Borth, the northern Ceredigon coast is bleaker, with boulder beaches and an austere cliffline. Secondly Ceredigion is less well-served by the major road routes into rural Wales. Although the A44 runs directly west into Aberystwyth, the route is relatively less developed, with poor access throughout its length, in both England and Wales, than routes into north and south Wales. It is remarkable, however, that Ceredigion had not seen a comparable historical relationship as the resort of the wealthy West Midlands as seen in other coastal areas. Thirdly, are factors related to the historical settlement pattern. In Ceredigion an abandonment of lead mining settlements, comparable to the end of the slate industry, had taken place much earlier in the late 19 th C/early 20 th C, and the abandoned housing was largely derelict by the late 20thC. The distribution of second homes, therefore, tended to be governed by the availability of isolated farmsteads leading to a more diffuse pattern of second home ownership. CSC R&I 8 11/8/2004

11 Ceredigion therefore has a lower proportion of second homes (however they are counted) than other rural and coastal local authority areas. According to Tewdwr-Jones the county is ranked third after Gwynedd, Pembrokeshire, or fourth after Ynys Mon. On the higher scenario council tax measures, for example, Ceredigion appears fourth in order of rank with second homes comprising between 5.31% and 6.24% of the housing stock between 1991 and 2001, as compared to around 6% to 12% in Gwynedd, 4% to 7% in Pembrokeshire, and 5% to 6% in Ynys Mon. However there are several problems with the Tewdwr-Jones data and the indications are that the proportion of Council Tax classification of second homes in Ceredigion has remained below 4.5% of total housing stock since 1996/7. UA Total Hsehld Spaces Second/Holiday Homes %age Isle of Anglesey Gwynedd Conwy Denbighshire Flintshire Wrexham Powys Ceredigion Pembs Carms Swansea Neath Port Talbot Bridgend Vale of Glam RCT Merthyr Caerphilly CSC R&I 9 11/8/2004

12 Blaenau Gwent Torfaen Monmouth Newport Cardiff Table Census Second/Holiday Homes by Wales UAs On the data from the 2001 Census (Table xx) second/holiday homes comprise 3.1% of household spaces in Ceredigion, ranking the county fourth after Gwynedd (9.0%), Pembrokeshire (6.9%) and Ynys Mon (4.1%). Comparison of Ceredigion with Wales: Summary It is possible to assess the relative importance of second homes in Ceredigion against other areas of Wales. Historically, in Ceredigion the factors that have made an area attractive as a location for second homes, such as housing supply, natural environment and access, have not matched those in other areas of western rural Wales. Ceredigion would appear to be a less desirable location for second homes in terms of overall numbers and proportion of housing stock than areas of rural Wales to the north and south, and is usually ranked fourth after Gwynedd (where rates are far higher), Pembrokeshire, and Ynys Mon. There are also generally less second home hotspots in Ceredigion than in the adjacent authorities. Indeed in 2001 only New Quay town appears significantly above average levels, whilst all the three UAs ranked above Ceredigion on overall levels have several wards with substantially higher than average levels of second homes. Local Patterns of Second Home Ownership in Ceredigion The pattern of second home ownership is highly localised, not just within Wales at the level of local authorities, but more significantly at the level of electoral wards or at an even more local level. This localised pattern results from the historical factors behind second home ownership and the factors of natural and built environment which makes certain areas more desirable locations. These locations may be geographically quite close to other far less desirable areas. According to data from 2001 Census and recent Council Tax lists, second homes in Ceredigion are concentrated in there are three main areas: the southern coast, Borth, and the inland area around Pumlumon and the Rheidol valleys (Fig xx). These same areas are those identified in the earlier surveys from the 1970s onwards as having the greatest concentrations of second homes. South Ceredigion Coast This area comprises scenic elements of an attractive coast and immediate hinterland that make it a desirable area for second and holiday residences. According to the 2001 Census CSC R&I 10 11/8/2004

13 second homes form a high proportion of the total housing stock in New Quay (28%) and Penbryn (14%). Other wards with a high proportion of second homes include Aberporth and Llandysiliogo (5%) and Penparc (4.5%). According to 2004 Council Tax data, Sect 12 properties total 366 dwellings, 10% of all property, in the community council areas of New Quay, Llangrannog, Penbryn, Llandysiliogo, Llanllwchaiarn, and Aberporth. New Quay is a particular case within this area; it is one area within Ceredigion with an exceptionally high proportion of second homes, some 170 or 28% of all dwellings according to 2001 Census, a figure which may be compared to the 151 Sect 12 Council Tax properties (20.8% of properties) in This appears to be due to the combination of an attractive urban landscape and natural coastal environment with surplus housing following large-scale depopulation with a population decline of a third between the 1920s and 1960s. Pumlumon and Ystwyth/Rheidol Valleys An analysis of second homes as a proportion of all dwellings shows a concentration in the scenically attractive areas around the south of Pumlumon including the Rheidol and Ystwyth valleys. According to 2001 Census data Melindwr is the only inland electoral ward where second homes form a significant proportion (6.5%) of the total housing stock, although the actual number (65) is fairly small. The 2004 Council Tax data shows that in the Community Council areas of Blaenrheidol, Pontarfynach, Ysbyty Ystwyth 8.5% of all dwellings are second homes, however, again the actual numbers (57) are small. The upper Ystwyth valley was also one area noted in the 1960s (Welsh Office 1964) as an area where very cheap property in old mining villages such as Pontrhydygroes, had been acquired as holiday or weekend cottages in the 1950s. Borth The former fishing village with a sandy beach edge of Cors Fochno at the mouth of the Dyfi estuary, is the most obvious point on the north Ceredigion coast to develop a holiday accommodation market, and is also the site of large caravan parks and has a small serviced accommodation provision. Depopulation following the decline of the local fishing trade (similar to the conditions seen in New Quay) coupled with easy access by rail made it attractive to a sector of second homeowners. According to 2004 Council Tax data there are some 94 second homes, 11.7% of all dwellings. Together eight electoral wards in these three areas comprise 66% of second homes/holiday homes in the county. Elsewhere in Ceredigion 2001 Census data on electoral ward basis shows far lower proportions of second homes, typically between 2.5% to 4.5%. It is also likely that, as in the case of New Quay, second home ownership is even more concentrated at the level of individual settlements. Some initial work using Council Tax records was done to test these assumptions and to identify those settlements where second homes form a significant feature of local housing tenure. Patterns of Second Homes: Local Case Studies In general, outside the ward and Community Council areas outlined above, these properties appear fairly scattered throughout the second homes. In these areas of concentration the Ward areas of Borth and New Quay correspond fairly closely to the limits of those settlements. In other areas of relative second home concentration at Ward level such as the southern coastal wards and the inland wards, the ward boundaries included a wide rural area of open country and settlements. Two of these areas were chosen for a detailed study at he CSC R&I 11 11/8/2004

14 level of individual properties to establish whether any pattern of distribution, property type and location etc. could be seen. The two study areas were: Area A: an area of two adjacent community council areas in the eastern uplands which included three larger villages, a number of smaller hamlets and scattered dwellings. The area is scenically attractive with open upland areas and deep river valleys, although relatively inaccessible from major settlements. Historically, in addition to some larger, valley farms, the settlement pattern has been influenced by both the rise of metal mining and the encroachment of settlement on to marginal open land with the pressure for small holding land in the 19 th C. These locations were the first areas to feel the effects of depopulation with the decline of the mining industry and rural out-migration. Area B: an area of two adjacent community council areas on the coast south of New Quay. The area has an attractive coastline of bays and headlands, whilst inland of the coast the country consists of sheltered valleys cutting into more exposed country as it rises towards the main Cardigan-Aberystwyth road. Coastal villages grew up in the sheltered bays largely dependent upon the sea and living by fishing, small-scale shipbuilding and importing goods such as lime and coal for the agricultural hinterland. The decline of these activities from the late 19 th C. led to population decline and the partial abandonment of many of the smaller coastal settlements. In Area A out of a total of 455 properties there were some 39 (8.5%) Sect 12 properties. The detailed distribution showed two main concentrations: one was an area of exposed, marshy land lying at some distance from two larger settlements, the other an area situated on exposed and marshy land above 300m. In both areas settlement seemed to have originally been as encroachments on open land related to lead mining and subsistence smallholding. The buildings were single-storey cottages of rough earth-bonded stone construction with two rooms and animal housing which have gradually been extended with bathrooms and kitchens. In the first area some 7 out of 20 dwellings are Sect 12 properties, whilst in the second some 9 out of 20 dwellings are Sect. 12. properties. It was expected that a concentration of second homes would be found in the three main settlements in the Community Council areas, but in one village only two properties out of 60 and in the other two of some 160 properties only 9 were Sect 12 properties. Outside these areas the remaining 14 Sect 12 properties had a fairly scattered distribution, mainly in more remote and upland areas. Only one of the Sect 12 properties in Area A had been built in the past 20 years. In Area B out of a total of 1000 dwellings, 93 were Sect 12 properties. In contrast to Area A a greater concentration was apparent in the settlements than in other areas. However, the concentration was only seen in the coastal settlements. Outside of these areas Sect 12 properties showed a fairly scattered distribution with a few instances where two or three adjacent properties were grouped, for example in small terraces. Most of the Sect 12 properties appear to be older smaller properties, in the settlements, usually in the terraces of smaller cottages, although three of the Sect. 12 properties had been built in the 1990s. Area A corresponds to an early pattern of second home distribution. This was the area described by Beacham in the 1950s a location where abandoned, poor quality dwellings could be bought relatively cheaply. These properties were not then in demand locally and would have fallen into further dilapidation had they not been acquired as second homes, and surrounding ruins of similar dwellings in these areas show the extent and result of abandonment. Most of these were sited on poor marginal land in exposed and inaccessible locations and lacking in the basic amenities of electricity and running water. Although most CSC R&I 12 11/8/2004

15 are now supplied by mains electricity and the properties have been gradually improved over the years they still remain relatively inaccessible and can be inhospitable areas outside of summer, and may be of limited interest to the general housing market. From anecdotal evidence most of these properties have been used as second homes for many decades, and there is no evidence of an increase in the number of second homes in recent times. Area B shows a similar pattern of second home locations in the smaller and older housing, especially in the coastal villages, which presumably, was also relatively cheap in the 1950s and 1960s. These coastal locations were however, also attractive as second home locations in the earlier 20 th C. There has also been relatively more development in these more populated areas throughout the later 20 th C. than in the remoter upland areas, and a greater proportion of second homes are therefore in more recent housing stock from the 1950s, 60s etc. Local Patterns of Second Homes in Ceredigion: Summary Because of the high priority of scenic and environmental factors as well as the availability of buildings with a suitable character, the distribution of leisure second homes tends to be highly sensitive to local conditions and these more desirable localities do not change greatly over time. Second home ownership only approaches what may be considered significant levels in three areas of the county: the coast from New Quay southwards, Borth, and the Pumlumon/Rheidol/Ystwyth valley area. For historical reasons the greatest concentration is found in New Quay town. Outside of these areas second homes form a comparatively low proportion of all housing. Even within these areas the actual locations of second homes are highly concentrated and dependent upon particular circumstances such as attractive location or site or the availability of relatively cheap housing due to specific historical circumstances. Although some second homes will be in newer housing in locations more suited to the general market and to permanent occupation, there is little evidence of second homes being a widespread phenomenon either geographically or in terms of the range of locations and housing types. Local Trends in Second Homes Numbers Given the wide range of definitions and counting methods used it is difficult to analyse changes over the last 30 years. The most recent work is able to rely on a series of data from Council Tax returns which must be considered as fairly consistent in approach. These have tended to show a decrease of around 11% to 13% in second home ownership in Wales from the early 1990s. It is also apparent that second homes have fallen as a proportion of all household spaces or dwellings as the numbers of these have grown. This decline is related to a number of factors. It could mark changes in the national housing market as second homes are obviously one component of the wider market and economy. It may also be a symptom of a change in attitude brought on by the availability of cheaper and increasingly more accessible leisure homes in areas such as southern Spain, where climate and facilities are more conducive to leisure enjoyment. Equally, as demand for housing and house prices rise in even the most remote rural areas, second homes which previously showed relatively little capital gain may now represent for their owners more substantial assets for disposal. A fall in overall numbers has been seen in all geographical areas (Table xx). The contraction has been most noticeable in the main areas in Gwynedd and Pembrokeshire, in particular, where the number of ward hotspots reduced from 1991 to 2001 (Tewdwr-Jones p29-30), but CSC R&I 13 11/8/2004

16 a similar effect can be seen in Ceredigion where the same analysis shows only New Quay as a significant hotspot in This is not to imply, however, that the fall in numbers represents a permanent trend. Second home ownership is a symptom of a more affluent society with growing disposable income and more leisure time, and it is to be expected that it will continue to represent an attractive option for many people. In the end it is local factors such as local housing prices, availability of suitable properties, and the attractiveness of the area relative to other areas including areas outside the UK which will determine the future trend in local second home ownership. Some of the factors behind future trends are outlined in a later section. Local Trends in Number of Second Homes: Summary Since the 1980s second homes in Ceredigion have declined both in overall numbers and as a proportion of the county s housing stock. Over the past decade second home numbers in Wales as a whole have also declined and there has been a decline in all Welsh local authority areas except for Vale of Glamorgan. The demand for second homes is linked both to general economic health, including the state of the wider housing market, and the relative attractiveness of locations in terms of housing availability and environmental factors. The local decline in numbers of second homes, therefore could be due to competing attractiveness of other areas, the realisation of the increased value of property in the area, as well as factors pertaining nationally. Second Homes and the Local Housing Market Tewdwr-Jones concluded that whereas for Wales as a whole leisure-based second homes were not a major factor in the housing market they may be locally significant. This echoed earlier concerns particularly from the 1980s about the impact of second home ownership on local housing markets. A preliminary question must be to what extent second homes constitute a separate component of the housing market. We can ask specifically whether the second homes market is in any significant way different in terms of turnover, sales methods, dwelling type, or facilities and location from the general housing market. It should be borne in mind that there is likely to be as wide a range of demand in terms of price and features in the second homes market as is found in the general housing market. Turnover of Second Homes Evidence from the 1970s Cardiganshire second homes survey implied that a high proportion of second homes in the county had been held by their present owners or families for significantly longer periods than the pattern of ownership noted in other rural areas, with 47% of owners having held the property for more than 8 years. Although this might be affected by a bias in the survey response, there is also anecdotal evidence to suggest that second homes are held in the same family for some time, rather than being traded on the market. Although there are obviously new purchases of properties as second homes, the total number of second homes has fallen from highs in the 1980s. This implies a conversion of second residences into primary residences under whatever definition is being used, either through sales of second homes onto the general market, or through moves by second home owners to permanent residence in those properties. CSC R&I 14 11/8/2004

17 However, we may also ask even if numbers remain the same or decline is there any evidence for a significant turnover between permanent residences and second residences; is there evidence of significant purchase of dwellings as new second homes whilst existing second homes are turned into primary residences? One possible line of evidence would be comparison of individual addresses on successive years of Council Tax lists, however historical data is not at present available on this scale. The Ceredigion Revenue Manager, however, does not believe that there is a large turnover between the sectors in Ceredigion, and rather confirms that, although there are some new classifications, the majority of second homes have stayed within the category over the years. A large turnover or churn would also seem unlikely given the continued containment of second homes in certain small areas. It seems fairly certain that the turnover from one use to the other is small in relation to overall numbers, and that the changes in numbers represent an actual decline in second residences, rather than the net effect of larger turnover. Therefore, although for a period second homes may have represented the removal of certain types of accommodation from the local housing market, it appears that over the past two decades that in net terms more second homes are entering local housing markets through sales than are being removed from the local market. Method of Sale Without checking far a field, or following individual cases, it is difficult to assess whether second homes are marketed through channels and methods that significantly differ from the non-second home market. It must be assumed that some properties at least are sold through non-local estate agents. This may have the effect of placing them before the widest possible market in the hope of realising the best price, or that these agents are more conveniently located close to the vendors. Certainly some particular types of holiday accommodation such as chalets or caravans are sold through parallel market channels such as specialist agents, but there is little evidence of a substantial separate second property marketing system. The rises in local housing demand and higher price expectations locally will have made local marketing a more attractive proposition reducing the potential benefit from wider marketing. Dwelling Type, Location and Amenities A difference is apparent in the basic dwelling type between second homes and the total housing stock; second homes are more likely to be in terraced housing and less likely to be in semi-detached dwellings than main residences. Second homes are more likely to be in characterful older housing such as New Quay terraces, and less likely to be in late 20 th C housing or one estate developments where semi-detached housing is more common. The local case studies tend to confirm the view that a substantial proportion of local second homes were acquired as relatively cheap, small, poorer quality housing often in inaccessible locations. Although the properties have been improved and basic facilities such as electricity, bathrooms, etc. have been added, from the point of view of size and amenities, they are more likely to be at the lower end of the local housing offer. Some support for this may be seen in the comparison of Council Tax banding for all properties and for Sect 12 properties (Table 3) It is a working assumption that second homes are located not only in more attractive areas, but that the detail of situation and site are desirable qualities. Every individual decision on purchase, for primary as much as for second residences, will be a balance between price and desirability, however, we may assume that some situations such as new build estates, ex-local authority property etc, even when located in scenic areas are less desirable as second homes than others. CSC R&I 15 11/8/2004

18 Table 3. Ceredigion Council Tax Banding Second Homes and All Stock 2004 CT Band Second Homes (%) All Stock (%) A B C D E F 2 5 G There appears to be no link between levels of new build housing and the numbers or location of second homes. Firstly, on the overall county scale numbers of second homes have decreased over the past two decades. Secondly those areas within the county with the higher levels of new housing provision in the past two decades are among the areas where second homes are the least significant component of the local housing market. In the case study areas no ne of the Sect 12 dwellings had been built within the last 20 years. However, new build properties in the right location such as waterfront or marina developments will be attractive as second home purchases, and certain individuals may have a personal preference for modern housing amenities over qualities such as character or site that are usually seen as more desirable qualities in second homes. At present at least the numbers would appear to represent a relatively low proportion of the second home sector. Reference has been made above to the fact that remoter locations, and older unimproved housing were more attractive to earlier second homeowners than to many local households. To some extent the trend is liable to reverse with a re-discovery of rural living by generations more removed from direct experience of its deprivations, and by the fact that rising local demand extends into all geographical areas. In some areas, however, the reasons for their attractiveness, such as remoteness and inaccessibility, still mitigate against their attractiveness to the general housing market. Second Homes and Local Housing Markets: Summary It is apparent that the second home market differs from the general local housing market in a number of respects: there is relatively little turnover of properties with many properties being held in the same family ownership for some time; the stock of second homes has tended to be concentrated in the same areas; certain features of site and location etc. are more important than convenience and facilities. However, there are also factors which suggest that second homes sector is increasingly integrated with the local housing market. In particular the rise in local property prices has led to more second homes being sold locally and entering the general housing supply. At the CSC R&I 16 11/8/2004

19 same time many of the features desirable in the second homes market such as character and location are apparent in the general market with greater emphasis on quality of lifestyle etc. This component of housing demand is met largely through the second hand supply, since new supply location is severely limited due to planning policy restrictions. Finally there is continuing erosion of the clear distinction between main and non-main residences. With present levels of second home ownership, outside of a few localities there is little evidence that the second homes sector forms anything more than a minor component of local housing. Neither is it easy to see evidence for a connection between recent housing provision and the second homes sector, indeed in many aspects the two sectors are running in contrary directions. Implications for Housing and Other Public Policy Areas It is apparent that from the 1970s concerns were voiced earlier over the impact of second home ownership on aspects of housing, social welfare and community and cultural cohesion. Concern in the 1970s at least appears to have been mainly directed towards fears that second home ownership would lead to widespread retirement by owners placing pressure on local social and health services. In the 1980s during a period of apparent growth in second home ownership in rural Wales, the focus of attention moved to the effects of this growth on demographic change, economic well-being and the continued existence of local communities, particularly as Welsh-speaking communities. Papers were issued both by pressure groups such as Cymdeithas yr Iaith, and by local planning authorities, and evidence and policy proposals were presented to the Welsh Office with a view to introducing some form of control on second homes in rural Wales. Many of the policy implications are based on the assumption of a rising trend of second homes numbers in areas such as Ceredigion, although as we have seen this later proved not to have been the case, and there is some basis for disputing, at least in Ceredigion, the high numbers quoted in the 1980s, for example. The fact that this trend has reversed would equally appear to counter the policy arguments of twenty years ago as related to second homes. The policy concerns would now appear to be better considered as part of a wider debate on the changing nature of rural and urban societies. Effect on Local Services A preliminary concern was the effect of second home ownership on local facilities and services such as local shops. This in main comes from the basic fact that part-time occupation will, self-evidently, create less demand for services than full-time occupation. The threat to local services in the longer term, however, has proved to come from a number of sources. The major factors behind closures of local shops, for example, have been changes in the structure of provision of services and the preference of all types of resident for choice and convenience leading to spending mainly in large supermarkets and retail parks rather than small shops. Again the effects of falling birth rates generally and locally low birth rates, have had a greater effect on school numbers which are sustained in many areas only through net in-migration of school age population. Effect on Health and Social Services Conversely, at the same time there was concern that second homes were leading to the migration of a more elderly population as owners moved to live permanently in their second CSC R&I 17 11/8/2004