Successful defence of policy to limit occupation of second homes

Judicial review of second homes policy

Cornwall Council (the Council) decided in March this year to hold a local referendum on the making of the St Ives Neighbourhood Development Plan (the Plan). This is a local land use policy document produced by a neighbourhood group, in this case St Ives Town Council, and which must conform with Cornwall Council’s local plan and with national planning policies set out in the National Planning Policy Framework (the NPPF).

The Plan included a draft policy (the Second Home Policy) intended to address a perceived problem of uncontrolled growth of dwellings used as second or holiday homes, by requiring new open market housing (including replacement housing) to have a restriction to ensure its occupancy as a principal residence.

Following a consultation exercise in relation to the Plan policies, a number of representations including from the Council’s Affordable Housing Team were made in relation to the draft Second Home Policy raising concerns that it would depress the value of new housing in the local market which would have the effect of making it unviable for developers to provide affordable housing within their housing mix, and others were concerned about the impact on the local tourism and leisure markets. The impact on human rights was also raised.

The Council addressed compliance with human rights stating that there must be an “exceptional justification” for applying such a restriction on occupation and concluded that there could be a case in the face of the evidence provided to justify such a restriction. Following this the Council held an examination into the Plan and the Examiner found that the Plan complied with the relevant statutory requirements and should proceed to a referendum. The Examiner did not specifically deal with human rights compatibility but following a threat of judicial review by RLT Built Environment Limited (RLT) which is a local housing developer, the Examiner provided additional comments concluding that there was no evidence to support a contention that the Plan did not comply with the Human Rights Act 1998.

Following this the Council’s planning committee resolved that the Council should proceed with a local referendum. Voters were asked “Do you want [the Council] to use the neighbourhood plan for St Ives to help decide planning applications in the neighbourhood area?”. 83% of those who voted were in favour of the proposition.

RLT challenged the outcome of the referendum on a number of grounds including that the Plan was in breach of Article 8 of the European Convention on Human Rights as the Second Home Policy was neither necessary nor proportional in terms of the objectives it was seeking to achieve and therefore would unlawfully interfere with respect for private and family life and for a person’s home. If this was the case the statutory tests required to hold a referendum had not been met.

RLT argued that the Council was obliged to consider whether a policy might engage the Article 8 rights is some way in the future. An example given was a change in circumstances where a person has to work away from the area during the week and that their house ceases to be their principle residence in breach of the terms of the policy and any restrictions placed by a planning permission on its occupation as a principal residence. RLT said that such an interference was not justified.

The High Court rejected RLT’s grounds of challenge and concluded that a future purchaser of a dwelling built at a time after the Second Homes Policy has come into effect will have purchased in the full knowledge of the restriction placed on its occupation as a principal residence and the potential consequences of having to move away. Consequently there would be no uncertainty caused by the policy even though a future occupier would not know precisely how the Council may choose to enforce the restriction on occupation. The High Court also held that the Second Homes Policy was in pursuit of a legitimate public interest identified in Article 8, namely the interests of economic well-being of the country. The High Court also held that the Second Homes Policy was necessary as there was no evidence that the alternative options considered by the Council and also put forward by RLT would work in practice or satisfy the objective of the Second Home Policy to safeguard the sustainability of the settlements in the Plan area “whose communities are being eroded through the amount of properties that are not occupied on a permanent basis”.

Comment

One of the key points considered by the High Court was the objectives of the proposed Second Home Policy being to safeguard the sustainability of settlements in the Plan area. The assessment of potential interference with Article 8 rights had to be considered in this context. Following an assessment by the Council of the alterative options it had reasonably concluded that there were no suitable alternatives to meet the objective. Following that it had also applied the correct tests in terms of any impact on human rights as a result of pursuing the Second Home Policy.

Local authorities and neighbourhood groups in areas popular with second homes where there is a perceived impact on the sustainability of good planning of their areas will be encouraged by the outcome of this case. The case is helpful both in guiding local authorities and neighbourhood groups and developers who may oppose such policies as to the correct tests which must be followed when similar policies are proposed to be adopted. It will be interesting to see if the implementation of the Second Home Policy has the unintended consequence of depressing the local housing market, impact on the ability of home owners to secure a mortgage, depress the local tourism and leisure industry and discourage people from moving to the area for work purposes.