House prices in the popular seaside town of Tenby are rapidly declining as second-home owners scramble to sell their properties. This comes in response to a significant increase in council tax rates, which has put a strain on those who own holiday homes in the area. The picturesque town, well-known for its colourful buildings and stunning beaches, is now grappling with a housing market crisis as a result of the tax hike.
A staggering 25% of properties in Tenby are designated as holiday homes, with 154 of them currently listed for sale on the property website Rightmove. However, there are speculations that this figure may be inflated due to homeowners exploiting a loophole that exempts properties listed at a “reasonable price.” Principality Building Society reports indicate that asking prices across Pembrokeshire have plummeted by 8.9%, with Tenby experiencing an even more drastic decrease, according to local estate agents.
Calum Phillips, a senior sales negotiator at a prominent estate agency in Tenby, highlighted the profound impact of the tax increase on the housing market. He revealed that conversations about the tax and its consequences have become a daily occurrence with both buyers and sellers. Phillips mentioned that many second-home owners are either looking to sell their properties or list them to obtain a 12-month exemption from the tax.
Buyers are increasingly aware of the diminished presence of second-home owners in the market due to the tax, resulting in a downward pressure on prices. Phillips also pointed out that the seafront properties in Tenby are largely unaffordable for first-time buyers, with limited amenities suitable for families. Moreover, he expressed concerns about the potential negative impact on tourism in Tenby if holidaymakers start to avoid the area due to the tax implications.
The debate over the second home council tax premium in Pembrokeshire council has been contentious, with members divided on the appropriate level to set it at. Council officials argued that any reduction in the premium would lead to a significant loss in revenue for the local authority, potentially affecting essential services. Despite differing opinions within the council, a decision was made to reduce the premium to 150%, compromising between conflicting viewpoints.
Council leader Cllr Jon Harvey defended the decision, emphasizing the financial implications of further reducing the premium. He raised concerns about the potential repercussions on residents if the council were to lose a substantial amount of revenue due to the tax adjustments. This decision reflects the complexity and challenges faced by local governments in balancing the interests of different stakeholders while ensuring the financial stability of the community.
Overall, the situation in Tenby serves as a cautionary tale about the potential consequences of tax policy changes on housing markets and local economies. The ongoing developments in Tenby underscore the delicate balance between supporting local residents and managing the impact of second-home ownership on communities. As the housing market in Tenby continues to evolve, stakeholders will need to navigate these challenges thoughtfully to ensure the long-term sustainability of the town’s economy and community.