Refusal to Remove Second Homes Restriction
On 16 June 2025, Inspector Marigold refused to remove a condition attached to a permission for four luxury flats requiring they be occupied as principal homes only.
The condition was imposed pursuant to policy H3 of the Salcombe Neighbourhood Development Plan, which recognised that “the sustainability of Salcombe Parish is being compromised through the amount of properties that re not occupied on a permanent basis” such that “new open market housing, excluding replacement dwellings will only be supported where there is a planning condition […] to ensure its occupancy as a Principal Residence […] new unrestricted market homes will not be supported at any time.”
The four flat scheme was built out in 2020, but none of the flats have been occupied since. The Appellant argued this was due to the principal occupancy condition, and contented there were no buyers for properties with such a restriction. For that reason, the Appellant first applied to have the condition removed last year (which failed), and then reapplied for a retrospective permission for the four flat scheme without a principal occupancy condition (which was the subject of this appeal)
The Appellant’s argument in 2025 was that it had marketed the flats with a principal occupancy condition for four years and no one had made an offer despite even at a discounted price. The Appellant also argued that the properties would be unviable if sold with the principal occupancy condition. He further argued that policy H3 would not be offended by the removal of the condition because the policy determined whether an application would be supported by the policy and did not effectively prevent new dwellings from coming forward without principal residency conditions.
The Inspector recognised the imbalance of properties in South Hams, noting it “has very high levels of second homes and holiday lets, with nearly half of all properties being not permanently occupied, harming its vitality” [10]. Despite policy H3 being “permissively worded”, the intention of the policy was deemed “to restrict new homes in Salcombe to principal residency” and there would be a conflict with that intention resulting in policy conflict [13]. The effect of allowing the appeal on an unrestricted basis was found to “worsen the imbalance between principal residences and second/holiday homes in Salcombe” and could “undermine the efficacy of Policy H3” setting an unhelpful local precedent which “would be to risk further worsening the imbalance” [18]. The harm arising from conflict with policy H3 was therefore afforded “very significant weight.”
As to the Appellant’s marketing exercise, the Inspector found that they had not been marketed at the correct price [23]-[25] and that a further reduction may result in the properties being sold. The Inspector found that “realisation of risk does not in itself necessitate further viability assessment or trigger a review mechanism” and “such mechanisms are not a tool to protect a return to the developer” [29]. As such the viability position did not justify the removal of the principal occupancy condition [33], with the Inspector rejecting the Appellant’s “contention that the planning system entitles developers to expect a reasonable return from development, or that the need for a return justifies non-compliance with planning policy” [32].
The Inspector noted the Council did not have a five-year housing land supply [35] meaning the tilted balance was engaged. He found the “additional benefits of the unrestricted accommodation, over and above the as-built situation are minimal, and essentially amount to financial advantages to the appellant” resulting in limited positive weight [38].
Overall, the Inspector found that the appeal development (without a restriction) would conflict with the development plan as a whole. Applying the tilted balance, the Inspector found that (without a principal occupancy restriction), the adverse impacts of the scheme would significantly and demonstrably outweigh the benefits (applying para 11(d)(ii) of the NPPF) however with a principal residency condition the benefits would outweigh the harm [47], meaning that permission could be granted but with a principal occupancy condition in place [48].
The case is likely to be of interest to those performing viability assessments or marketing exercises aimed at valuing/selling properties which are subject to agricultural ties or principal residency conditions. In particular, the case demonstrates that in order to avoid such conditions, the onus will be on the Appellant to provide significant justification for the same. Here it was not enough that the properties had been marketed for some time, as the Appellant had not explored the prospect of a sale with a further reduction. Further, the case offers insight into the limited circumstances in which a post-build viability assessment will justify an amendment to conditions attached to a planning permission, particularly where the aim of such an exercise is to protect developer profit.
Costs were also awarded in favour of the Council following the provision of late evidence/submissions causing an earlier hearing to be adjourned.
A copy of the decision letter is available here.
Earlier stages of the case were covered by the BBC here
Rowan Clapp appeared for the successful local authority, South Hams District Council, instructed by David Fairbairn of the Council’s legal team.
