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Second home boom denied

11 May 2004
The Economic Secretary to the Treasury, John Healey, has dismissed warnings that new rules on pension plans could result in leap in demand for second homes.

The warning came from Lib Dem MP Andrew George, whose Cornish constituency includes some communities with the highest levels of second home ownership in the country.

He told Mr Healey that 40 per cent relief on property purchases and exemption from capital gains tax for purchases of residential property is likely to create an even greater demand for second and holiday homes.

Mr George had accepted that the scheme, "Self Invested Personal Pensions", is unlikely to be used to purchase an investor's main residence, but that purchases of second homes could increase dramatically. But the Minister told Mr George that "there would be no incentive to shelter second homes in a pension".

Following the debate Mr George said: "I was disappointed by the Minister's response. He is obviously not aware how the bulk of second homes are managed by their owners.