Work starts on schemes backed by second home tax

Construction has begun on two affordable housing developments in North Yorkshire partly funded by a council tax premium on second homes.

Since April 2025, council tax bills in the county have been effectively doubled for owners of second homes, generating a projected £10m per year to be spent on creating affordable homes and "other projects", according to North Yorkshire Council.

Work on two multimillion-pound developments is under way in Hunmanby and Shipton by Beningbrough, which the council said had been "unlocked" by almost £900,000 from the second home premium.

However, campaigners against the policy have said the impact of the tax on coastal communities and businesses had been overlooked.

In September, they told the BBC that solving a "genuine housing crisis" was "much more complex", and that many second homes would not be appropriate for first-time buyers or local families.

Simon Myers, North Yorkshire Council's executive member for housing, said of the new developments: "Providing enough affordable housing is one of the biggest challenges facing North Yorkshire.

"When we introduced the second homes premium, we promised that the funding would be reinvested to provide more social and supported housing for local people, with an emphasis on social rent."

Both developments are being led by Broadacres Housing Association, the authority said.

The scheme in Hunmanby is expected to result in 15 affordable homes, funded by £435,000 from the council, £2.4m from Broadacres and £1.42m from Homes England.

The Shipton by Beningbrough scheme includes 11 affordable homes, funded by £440,000 from North Yorkshire Council, £1.9m from Broadacres and £905,000 from Homes England.

Myers said that without the grants from the second homes premium, the schemes "would not have been possible".

"The developments will help local people and families remain in the communities where they want to live," he said.

Claire Townson, chief executive of Broadacres, said: "We know many rural villages and coastal communities are facing significant challenges when it comes to housing affordability, with local people and families often finding it difficult to secure a home close to their support networks, employment and schools.

"These schemes will help address that need by ensuring homes are prioritised for people with a strong local connection.

"They also show how funding raised locally can be reinvested to create lasting benefits for future generations across North Yorkshire."

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