BRITAIN'S “best” seaside town has seen house prices plunge as second home owners scramble to sell theirs after a major council tax hike.
Last year, Tenby in Pembrokeshire, Wales, faced a whopping 200 per cent increase on second .
This has since dropped to 150 per cent, yet
In Tenby, over a quarter of all properties are classified as holiday homes, with 154 of them listed for sale on .
Tenby is known for its historic and sandy beaches, but now, its facing a in freefall.
Asking prices across Pembrokeshire have also dropped by 8.9 per cent, the Principality Building Society claims.
But estate agents suggest the fall is even steeper.
Calum Phillips, senior sales negotiator with a leading estate agency in Tenby, said the tax has had a crippling effect.
He said: “The second-home tax and the effect it's had on the town is a conversation I have every day with buyers and sellers.
“The majority of second-home owners are looking to either sell their properties or list not to get 12-months exemption.
“Buyers know that there aren't many second-home owners in the market any more because of the tax and that's forcing down prices.”
When Pembrokeshire council debated the second home premium last year, members were split over the level to set it at.
Council officials argued that every 50 percentage point cut in the premium was equivalent to a £2.6m cut in revenue for the cash-strapped local authority.
The council settled on a halfway reduction to 150 per cent against the wishes of the ruling group.
It has now been speculated that second home owners struggling to pay the tax are seeking loopholes.
Furious locals in Padstow, , told the Mail Online crafty property owners are using a legal get-around to skirt a 100 per cent premium on second homes.
The system was rolled out by local authorities earlier this month.
By listing their holiday boltholes for sale, owners can receive a 12-month exemption from the higher council levy even if the property doesn't sell.
Neighbours living in the stunning of Padstow say the problem is so severe, it could erase the seaside resort's heritage.
It could also permanently drive away local families who have lived there for generations.
Paula Milton, 75, who has lived in the town her whole life, said: “At least 60 per cent of the houses near me are second homes, you can see how many homes have key safes outside.
“Second homes have had a huge effect on Padstow in the last few years, this used to be a close community where people knew each other but this isn't Padstow any more.
“Prices are so high my daughter will never be able to come back here, she'll have to wait for me to die.”
Despite causing such angst, this tactic is fully legal as long as properties are publicly marketed and listed at a price in line with the local area.
