The way Oliver Nelson sees it, you can just about tell the whole recent history of Burnham Market through Satchells, the resident wine merchant. The oldest shop in this impossibly picturesque north Norfolk village, it opened in the early 1880s, and has stayed open, through thick and thin, then thick again, ever since.
“Yep, through all its various guises, from Victorian farming town to what it is today,” Nelson says, from behind the counter. When it was opened by Frederick Valentine Satchell, the place had dual roles as both the village off-licence and a purveyor of agricultural hardware – serving the many farm workers who lived in surrounding terrace cottages with the two things they needed to work and relax.
“Burnham Market was a thriving place back then, and people wanted their beer and wine. Then the mechanisation of agriculture happened in the post-war period and reduced the number of jobs in towns like this, so Satchells adapted. For a while the village was very, very quiet. And then tourism arrived and revived it, bringing jobs back. Now we’re still here, selling rare wines and everything else in a place that’s thriving again.”
Playing politics
The 32 year-old sighs and props an elbow up on a shelf lined with independent gins. “So you can politicise second home ownership as much as you like, but the reality is that we wouldn’t be standing here chatting if it wasn’t for people coming here and spending their money.”
Yet politicising second home ownership is precisely what seems to be happening. Not just in Burnham Market and the rest of the north Norfolk coast, where almost 10 per cent of properties are second homes – the highest proportion outside of the city of London – but all over the country.
Under changes implemented this month, local authorities in England are able to charge second home owners double council tax, raising the bills of hundreds of thousands of owners from £2,280 to £4,560, while the owners of larger properties could face bills of up to £8,000. Generous tax breaks for furnished holiday lets also came to end this week, slashing the ability of landlords to deduct mortgage interest from their rental income in order to reduce their income tax bills.
Throw in the rise in stamp duty introduced by Chancellor Rachel Reeves in the autumn budget – meaning new buyers must pay as much as 17 per cent in tax when they purchase a second home – plus higher mortgage rates and myriad other rising costs that have made buying property an unappealing pursuit in 2025, and suddenly anybody who owns, or might like to own, a second home is likely to be thoroughly put off.
The war on second homes wasn’t started by Sir Keir Starmer’s Government, even if the Prime Minister is now waging it in earnest. The council tax rise now overseen by Labour was introduced in The Levelling-Up and Regeneration Act 2023 – a product of the supposedly low-tax Rishi Sunak government, when Michael Gove was levelling up secretary. In 2022, Gove vowed to end the “scourge” of unoccupied second homes to “bring life back” to communities.
The idea was to raise funds that could be set aside to tackle housing challenges, assuage councils’ rising social care costs and free up properties for local people. Labour-run Wales, where some councils introduced a 200 per cent council tax premium a year ago, is seen as the test case for how this might play out. When The Telegraph visited Pembrokeshire last week, it found Tenby and other second home hotspots “in a lose-lose situation”. Houses were on the market and empty, out of reach of locals; tourists were put off investing in the area; and retail and hospitality businesses were increasingly nervous.
‘A modern-day sin tax’
Now English second homes are firmly in the crosshairs. Critics say that the measures imposed on second home owners amount to little more than an ill thought-out anti-wealth tax, one which may have been conceived by Tories but looks to share characteristics with other controversial Labour measures, such as the inheritance tax rise for farmers and the addition of 20 per cent VAT to private school fees, in potentially doing more economic harm than good.
“The question is: what are they trying to achieve through taxing second home owners?” asks Gerard Lyons, chief economic strategist at Netwealth Wealth Management. “Well, raise tax revenue? Possibly, but then, the revenue raised will be relatively limited. Or, is it to discourage behaviour, a kind of modern-day version of a ‘sin tax’ like you’d put on tobacco and alcohol to discourage smoking and drinking?
“Clearly there’s an aspect of that here, to discourage people from owning second properties. And it might achieve that. But Britain already taxes property more than most other countries, but we do it in a very ineffective way, principally through stamp duty, which discourages turnover. So it’s a difficult one to defend, and a stepping stone to a wider wealth tax, which is not to be welcomed. Because when you start to tax assets it has all sorts of negative consequences.”
Perpetual tax increases
We speak the day after it emerged that London is no longer one of the top five wealthiest cities in the world, after losing a higher proportion of millionaires than anywhere other than Moscow. One theory behind the change is that Labour’s various tax policies, especially the abolition of the non-domiciled tax regime, disincentivise the wealthy from investing in the UK.
“Yes, I’ve just been discussing that,” Lyons says. “It’s interesting. We’ve now gone past that tipping point where people see it as a normal sequence of events that taxes go up and you’re squeezed, so people might decide to move or leave. Which is not a good situation for the economy.”
England makes a healthy sum from second and holiday homes: according to the latest Great Britain Tourism Survey (GBTS), the total value of overnight holiday trips in England from commercial property rentals came to £4.5 billion in 2024 – up 5.2 per cent on the previous year. In certain regions, not least north Norfolk and the South-West, whole swathes of the coast rely on short-term visitors.
Burnham Market is one such place. A couple of miles from the wide, wild beaches of Holkham and Brancaster, boxed in by nature reserves, and listing under east Anglia’s gargantuan skies, it’s easy to see why people might like to visit, and easier still to see why they might like to invest in the place.
With its village green and flint-stoned cottages drenched in spring sunshine this week, it’s as if AI has been asked to generate the image of a quaint English scene. And the retail options – mainly interiors shops-cum-galleries, delis, gastropubs, a Joules, a Jack Wills, even a “doggy boutique” – have been built for people good at spending money and time.
“Second home owners are no better than locals – we are supported by both, and welcome both – but the thing that’s not always appreciated is that without second homes, there’s nothing here,” Nelson says.
“No business in this village could survive on locals alone, not one. None of us makes probably more than 25 per cent of our turnover from local business and that’s being overly generous. But this is the key thing: to protect a village like this for the locals, you need the tourists.
“The double council tax doesn’t serve any purpose really, because all you’re doing is removing an extra bit of disposable income from the local economy. And I can’t see the money going back into helping the locals, so where is it going? The majority of second home owners I’ve spoken to don’t have a particular attitude against it so much as they wish they knew where it was going. There’s no evidence it’s going anywhere other than council coffers.”
‘Second home owners are not all evil’
That’s precisely what one second home owner, Gerry Smith, has said will happen. Smith, 75, and his wife, Sue, 74, are retired from running a bearing manufacturing and distribution business and now divide their time between homes in Milton Keynes and Brinton, a 30 minute drive south-east from Burnham Market. “In the end,” he says, “doubling the council tax means that we will spend £3,500 per year less with north Norfolk businesses.”
Smith is keen to stress that the preconception about second home owners, one that may well be shared by some in Whitehall, is that they are either wealthy enough to not notice a doubling of council tax, or greedily hoard property without giving any benefit to a council.
“But we’re there half the week, and we go out to eat and shop far more in Norfolk than at our other home, and we get involved in the community. And if we’re not there then our children use it and do the same. Councils don’t seem to understand this,” Smith says.
“Doubling taxation on people who are just normal wage earners, we’re not super wage-earners… It’s just immoral, I think. It’s easy for everybody else to say ‘Ah well, they can afford it…’ But there comes a point where you can’t afford it and just feel you’re being made a fool of. The general public needs to understand that second home owners aren’t all evil.”
In Burnham Market, Spencer Cushing, 53, branch manager of Sowerbys estate agents, says the property market remains strong in the village – “most of the bigger houses in the village, not the cottages, are being bought by people who are moving here to live, so its popularity is not just for second home owners” – but recent tax changes are starting to influence things.
“Second home owners tend to sell after 10 or 15 years, and that’s for all sorts of very standard reasons – they aren’t using it enough, they move their first home, their children grow up, whatever it may be – but when I’m doing valuations, the council tax matter has come up enough times lately for me to know it is becoming a factor in selling. It’s not the factor, but it’s being mentioned.”
The combination of “interest rates, stamp duty and the fact you don’t get mortgage relief on furnished lets” has resulted in a stagnation in the number of second homes sold, Cushing adds.
“Everyone’s preconception of second home owners is these uber-wealthy Londoners, but the reality is they’re more likely to be someone who’s inherited a share of a family home, got a lump sum of money, then gone, ‘We love coming on holiday to Norfolk, why don’t we buy a little cottage for our holidays, and rent it out so other people can enjoy it, then it’ll pay for itself? Happy days.’ But that’s all changed because your small mortgage that did cost £200 per month now costs £1,000.”
The principle of second homes has been a bone of contention in the UK for longer than most policy-makers have been alive. 45 years ago, the famous episode of Not the Nine O’Clock News aired which ended with a close-up shot of a crackling blaze and the words: “Come home to a real fire – buy a cottage in Wales”, inspired by arson attacks on English-owned second homes.
Only three years ago, residents both permanent and temporary woke to fresh graffiti in St Agnes, in north-west Cornwall. “Second home owners give something back: Rent or sell your empty houses to local people at a fair price,” it read. Beside it lay an after-thought: “No more investment properties.”
Business owners in Burnham Market have done what they can to quell any division in the village. The former parish council chairman, Dennis Clark, said last year that there was a “genuine hatred” of second home owners. In response, Satchells put a sign outside reading, “second home owners welcome”, while Tim Roberts, who owns four businesses around the green, took the bolder step of banning Clark from his sites.
“Yeah, well he’s not on the parish council anymore, you’ll notice,” Roberts, 66, says, in his office behind No.29, his bar and restaurant with rooms, which throngs with lunchtime visitors. “The second home owners are the people who spend more money per head than anybody. So I banned him to make the point of not cutting off your nose to spite your face.”
Properties out of locals’ reach
Roberts points out that it’s not just shops and restaurants that benefit from tourism. “So do construction workers, gardeners, cleaners, there’s all these different jobs for locals that come from it.
“And you know, one of the arguments put forward is that those houses are being put out of the reach of locals. But those houses would be out of the reach of locals anyway. What local has got £2.5 million to put into a house? So I don’t understand the reasoning behind some of the policies.
“A lot of the second home owners in this village don’t rent it out, but they come every weekend. So for the council they’re actually not having their bins emptied as much, not using the roads as much, not creating traffic, but they’re still being asked to pay double? It’s busy here, but if they keep putting the screws on, it’ll stop, I’m convinced.”
Cushing is in agreement: Burnham Market doesn’t profit from turning off the tap of visitors. “If you want a village to die, as so often happens with villages that were formed out of agriculture, then this is the quickest route,” he says. “This village will always be popular because it has fantastic facilities, and it’s a beautiful place to live. But without that money coming in, those facilities wouldn’t exist. That’s the reality.”
Critics of the anti-second home measures have suggested that ministers and councils are heading for the wrong end of the Laffer Curve, the economic theory that once taxes are raised beyond a certain point, revenue will fall. In order words, you can only soak the rich so much before they simply stop spending.
At the mention of this, Nelson begins nodding.
“Yes, which is a problem, a big problem. This is an area which bears the brunt of the Laffer Curve quite early on, because you’re taking disposable income from a group that spends their money here. Cornwall will feel it harder and earlier, then us. And we’ll feel it this year. How can we not? If we’ve got customers with £30,000 less disposable income, that’s going to come out of the woodwork somehow, isn’t it?”
How much the government – either Sunak’s or Starmer’s – saw this backlash from regular people coming is unclear. Lyons doesn’t believe “any impact assessment seems to have been done for this to determine the full consequences, which is another question mark. But from a political perspective, second homes is probably one of those things which local and central governments probably feel they’re able to push fairly easily without much resistance.”
Not for the first time, it turns out there’s greater resistance to a squeeze on perceived wealth than the Government imagined. Second home owners are now desperately searching for a reprieve – or at the very least a sympathetic ear that’s willing to listen to some nuance.
Meanwhile, the locals, businesses and other bystanders and beneficiaries can only wait and see. In Burnham Market, you suspect that Satchells, which has stood firm through it all, will ultimately be fine. Whatever happens, people will always need a drink.
Additional reporting by Ollie Corfe
The post How the war on second homes is backfiring appeared first on The Telegraph.
