Many houses in holiday areas can be sold only to locals, yet others are limited to use as second homes
From The Sunday Times
November 9, 2008
If you fancy taking a look at Trelose Waters, a modern four-bedroom house on sale near Liskeard, in Cornwall, it could pay to speak in a West Country lilt and sprinkle a bit of straw in your hair. It’s easy tobe won over by the house’s location, on eight acres in a green valley, but for most homebuyers it is forbidden fruit. Under a restrictive covenant put on the property when it was built, it can be occupied only by somebody “solely, mainly or lastly employed in agriculture or horticulture in the locality”. In other words, if you are a miner from Yorkshire, or even a farmer from the wrong end of Cornwall, you can clear off.
“We get an annual inspection from the council to make sure we are complying,” says Neil Wootten, 47, who owns the property with his wife, Jenine Burns, 42. “Somebody once complained about us living here, so the council was obliged to investigate, but we have always passed the test. I run a health-food company, supplying vitamin supplements, but we qualify because Jenine grows plants and shrubs in a polytunnel and has no other work.”
For househunters, occupancy restrictions can be baffling, particularly in the West Country, where they are especially prevalent. If you see a property in an estate agent’s window, it is easy to assume that anyone has the right to buy it, but that is far from always the case. Besides properties with agricultural occupancy restrictions, such as Trelose Waters, there are homes that can be occupied only by people who already live or work in the area.
The idea behind the latter provision is that it prevents affordable housing being bought up for second homes and pricing local people out of the market. Yet, bizarrely, just down the road you might find a perfectly decent home at a reasonable price – one that local people are forbidden from buying because of a contrary restriction that says it can be used only as a second home.
Wootten and Burns, who after four years at Trelose Waters have decided to emigrate to New Zealand, are paying a high price for their agricultural restriction. “The property is on the market for £595,000,” says Wootten. “Without the covenant, it would be more like £700,000. People are put off from seeing the house because of it, but I think a lot of people don’t really understand it. They think it means that they have to derive their main income from agriculture or horticulture, but it doesn’t. It just means that one member of the household has to spend most of their working time in one of those occupations.” With only eight acres, it could hardly be otherwise: your fingers would have to be luminous green to earn a living wage from that land alone.
Wootten and Burns, whose property has been on the market since June with Miller & Son (01837 55006, www.millerson.com), are not the only people affected by an occupancy restriction. Eighteen years ago, Bill Endacott bought his parents’ three-bed council house in Bovey Tracey, Devon. He allowed them to live there rent-free, but his father is now dead and his mother has moved to an almshouse, so Bill and his sister, Beverley Kemble, are trying to sell.
Soon after putting the house on the market for £167,500, through Ashby’s (01626 835845, www.ashbys.uk.com ), they found a potential buyer, but then ran into problems. The house, like many ex-local-authority properties in the area, has what is called a “Devon restriction”, which means it can be occupied only by someone who has lived or worked in the county for the past three years.
“This buyer was a local boy,” says Endacott. “He was born 300yd down the road, but he moved away, and has only been living back in Devon for 2½ years. I rang the council to ask why the house had a restriction when similar properties in Newton Abbot didn’t. They said it was because it was a hamlet and was in the Dartmoor National Park. But Bovey Tracey is a town and is outside the park.”
Bill Ashby, his estate agent, says the occupancy restriction can take between 5% and 10% off the value of a property. In a sliding market, the delay in finding a buyer who qualifies is costing them even more. “Last September, the property was valued at £197,500,” Kemble says.
In future, such restrictions will apply to even more homes. During the property boom, the government encouraged local authorities in honey-pot areas to place restrictions on new housing to prevent villages being colonised by second-home buyers.
Yet why, if there is a desperate need to preserve homes for locals, are so many properties in the West Country subject to restrictions preventing them from being occupied by locals? Search on the property websites for Exmoor and the north Cornwall coast near pricey Padstow and you can find a glut of Scandinavian-style lodges that would make solid three- or fourbed family homes for £120,000-£130,000. Read the small print, however, and you will often come across the words “restricted to holiday-home use only”.
Stuart Howe would love to sell Valley Lodge, a four-bedroom house he built two years ago on his land near Oakford-bridge, in north Devon, to a local, but he isn’t allowed to. A restrictive covenant put on the property when it was granted planning permission states it cannot be used as a principal residence.
In other words, if you own a mansion in Chelsea, you can buy Valley Lodge as a second home, but if you are a local wanting to trade up to house a growing family, you must look elsewhere. As a result, it has been on the market for six months and the price has been reduced from £400,000 to £350,000. Without the restriction, according to the selling agent, Seddons (01398 332006, www.seddon-estateagents.co.uk ), it would be worth nearer £450,000.
“I built it to let out, which I am allowed to do for 52 weeks of the year,” says Howe, who breeds racehorses for a living. “It has made £16,500 a year in rental income, but the credit crunch has forced me to sell.”
The property was given planning permission in open countryside, where building is not normally allowed, on the grounds that holiday accommodation brings in tourist money. Yet there is nothing in the restriction that obliges it to be let out as holiday accommodation at all: it could be used for two weeks in the summer, then boarded up for the rest of the year.
The system of occupancy restrictions is all the more confusing because, like Heinz products, they come in 57 varieties (see panel, above). There also seem to be wide variations in how the restrictions are policed. Wootten is treated to annual inspections, but Ashby says that others get away more lightly. “I have known councils decide to set an example and force people to sell properties if they are living in them and breaking the restrictions,” he says. “In other cases, councils invite owners to apply to have the restrictions lifted – which, quite often, they will be.”
Not every authority is prepared to do so, however. When he retired from the police in 1971, Hedley Pearce bought a 100-acre farm in Manaton, Devon. He was allowed to build a bungalow on condition that the property was only ever occupied by somebody employed or last employed in agriculture. He farmed until he was 80, then sold all but 3.2 acres of his land. Since his death, aged 90, in 2007, his daughter, Julia Biddell, has been trying to sell the property for £525,000 through Ashby’s.
“I always assumed I would be able to move into the bungalow as my father’s dependent, but Dartmoor National Park has said no,” she says. “They said I could move in only if I could prove I was farming the land as a viable business. But it only has 3.2 acres. It has been on the market since June and I haven’t had a single offer. I can’t sell it, I can’t live in it and I can’t rent it out.”
Jo Lavis, senior policy adviser for the Commission for Rural Communities, admits the rules can be confusing and counterproductive, but says those who live in such dwellings have bought at advantageous prices, knowing the rules. “Rural housing is often built on exceptional sites,” she says. “It might be discriminatory to say only farmers or local people can live there, but if it wasn’t for the restrictions, there would be no affordable housing at all.”
Agricultural occupancy At least one member of the household works in or derives their main income from farming.In practice, buyers can often get around it by keeping a goat or two.
Local occupancy At least one member of the household must have lived or worked in the area for a set period – but the definition of local can be wide.
Second-home restriction The owner must have a main address elsewhere. This wouldn’t stop you living there most of the year, but it could be a problem if, say, you enrol your children at a local school. Many affected properties are on holiday parks, but some stand alone. Holiday lodges and caravans are often limited to use for only part of the year; an 11-month restriction is common.
Holiday-home restriction The property cannot be occupied by the same person for more than a set number of days per year – although many can be let out year-round.
Retirement housing Typically only for over55s (though the age varies).
Key-worker housing Found largely in urban areas, and can be occupied only by public-sector employees, such as teachers and nurses. Usually applied to shared-ownership housing – with the slump, however, many housing associations are broadening the definition of a key worker.