Times request: Are there loads of people struggling to shift second homes in holiday hotspots such as South Devon due to second home council tax?

The second home council tax premium has undoubtedly made owning a holiday home more expensive, and for some owners it’s become the final push to sell. In hotspots such as South Devon and Cornwall we’re seeing longer selling times, more price reductions and a much smaller pool of buyers than during the pandemic boom. The tax isn’t the only factor—higher mortgage rates and weaker holiday-let returns are also weighing on the market—but together they’ve shifted the balance firmly in favour of buyers.

Our analysis of HM Land Registry data says yes, but only in the trophy towns, and the council tax is not acting alone.

Across ten second-home coastal towns in Devon and Cornwall, the median sale price fell 9% between 2023 and 2025, from £390,000 to £355,000. Across the rest of Devon and Cornwall it fell 2.7%. Sales in those ten towns dropped 9% while the rest of the region rose 4.6%. Salcombe went from a £900,000 median and 65 sales a year to £735,000 and 44. Detached homes tell the same story, so this is not a change in what is selling.

Three tax changes landed in six months: the stamp duty surcharge rising to 5% in October 2024, then the council tax premium and the end of the furnished holiday lettings regime, both in April 2025. Pinning it on council tax alone misreads it.

The deeper point is that these towns had priced themselves on a buyer the tax system was steadily removing.

Cornwall's second-home market is buckling. A 100% council tax premium, combined with higher mortgage rates, closed business rate loopholes, stamp duty surcharges and the country's highest water bills, has pushed listings up by as much as 50%. Middle-tier holiday cottages in St Ives, Rock and Padstow are struggling to shift as buyer demand thins. Sellers are cutting asking prices by 5–15% or inflating them deliberately to claim the temporary 12-month tax exemption while listed. Mortgage down-valuations of 5–10% are now routine, with surveyors catching up with falling sales data. The ultra-prime £1.5m+ coastal market holds firm, but standard second homes are stuck. These areas built their economies on second-home capital and high-spec holiday builds — yet even falling prices aren't rescuing local buyers, whose wages remain nowhere near enough to close the affordability gap the policy was meant to fix.

The headline data doesn't tell the full story because it groups primary residences and second homes together.

From speaking with estate agents across South Devon, there is a clear backlog of higher-value second homes, while the mainstream residential market continues to move. Many owners are choosing to hold rather than accept lower offers.

We're seeing this first-hand. Some second-home owners are switching to holiday letting. Once a property is available for 140 nights and let for at least 70 nights a year, it can usually move onto business rates instead of paying double council tax; and in many cases those business rates are £0.

Developers are also holiday letting completed homes rather than discounting them. We've seen properties generate £50,000–£150,000 a year while owners wait for the sales market to recover. With record occupancy and revenues at Finest Stays, holiday letting has become an attractive holding strategy. The bigger issue is pricing, not council tax.

The second-home council tax premium has definitely changed the conversation, particularly in traditional holiday hotspots. While it’s not causing a flood of distressed sales, it is making some owners rethink whether holding onto a second property still stacks up financially.
We’ve seen more enquiries from people looking to understand their options before deciding whether to sell, refinance or continue renting the property out. For many, it’s the combination of higher council tax, increased mortgage costs and ongoing maintenance that has tipped the balance rather than one factor alone.
Where demand from second-home buyers has softened, sellers are finding they need to price more realistically, especially in locations where the market became overheated during the pandemic. That doesn’t necessarily mean prices are collapsing, but it does mean buyers have more negotiating power than they did a few years ago.
The biggest shift is psychological. A second home is no longer viewed as a low-cos