‘I started with nothing!’: Second home owners on banks of stunning Lake Windermere rip into Labour’s ‘unfair’ mansion tax raid for being ‘wrong on every level’

Millionaire second home owners on the banks of Lake Windermere have reacted furiously to Labour‘s mansion tax raid.

Businessman David Sutton, 64, has three homes which stand together overlooking one of Britain’s most stunning vistas – one that he lives in and two he rents out to tourists.  

Under Rachel Reeves‘ so-called mansion tax, two of his properties would be eligible for the extra levy, leaving him and his wife at least £5,000 per year worse off.

He currently has all three properties on the market and plans a move back to his native Sheffield when the houses, two which are valued at £2.35m and the third at £1.4m, sell.

In her Budget on Wednesday, Chancellor Rachel Reeves said she was introducing a ‘high value council tax surcharge’ in England for homes worth £2million or more.

There will be four price bands with the surcharge starting at £2,500 a year for properties worth more than £2million.

It will rise to £7,500 for properties worth more than £5million. The charge will sit on top of usual council tax and will be applied to property owners directly, rather than tenants.

Mr Sutton told the Daily Mail: ‘I’ve worked very hard over my life and have earned every penny I have. 

‘I’m from a mining family and when I was 16 I had nothing, I was living in a friend’s house on a mattress under the eves.

‘But I built up an accountancy business which I was able to sell and we bought these properties, which were in a dreadful state and we’ve spent £2m on refurbishments over the last eight years.

‘All that only to have Rachel Reeves come along and impose this completely unfair tax, which is fundamentally wrong at any level.

‘Property should be sacrosanct, not something that can be taken away in taxation. I have played by the rules all my life and I expect the Government to play by the rules.

‘But they haven’t, they’re saying ‘we’re going to come along and didn’t our hands into your reserves because we’ve decided you can afford it.’

Mr Sutton has escaped the local authority’s ‘second home tax,’ because his other two properties are regarded as businesses.

However other homeowners on the lake face a double whammy if they don’t live full time in their Lake District properties and don’t use it as a holiday let. 

The changes brought in by Ms Reeves mean that from 2028 they will be paying mansion tax and double council tax under second home rules imposed in April by Westmorland and Furness Council.

Ahead of the ‘mansion tax’ being imposed next April, officials will conduct a ‘targeted valuation exercise’ to discover which homes are worth £2million and over.

Revaluations will then be conducted every five years, as Ms Reeves looks to rake in more than £400million a year from the levy on family homes.

But this has led to questions about how the Valuation Office, which maintains lists of council tax bands for 26.8 million properties, will undertake the work.

Council tax bands in England are still based on property values in 1991, more than 30 years ago, because there has not been a major revaluation since council tax was first introduced.

The Valuation Office currently assesses properties, to ensure they’re in the correct council tax band, when asked to do so during an appeal or band review.

It also automatically assess some properties, for example when a property has been made smaller or when a property is newly built’, according to its website.

Assessments are made on a number of factors, such as the property’s size, layout, character and location.

If the Valuation Office is unable to get enough information to band a property, they will arrange to visit the home.

An assessor will either gain all the information they need from the outside, including external pictures, or they may ask to go inside the property during a visit of up to 30 minutes.

Inspections can only happen with a homeowner’s consent.

Westmorland and Furness Council previously doubled council tax for second home owners in south Lakeland in April, a move welcomed by many locals.

The council was quick to allocate £300,000 to introducing 24 20mph zones to makes roads safer and encourage people to walk and cycle, reducing pollution in the national park.

However it committed to spend just £1m per year towards affordable housing schemes, split between £150,000 on planning and £850,000 on the delivery of new homes.

Mr Sutton, a supporter of Reform, said: ‘More and more people are going onto benefits, that’s what rattles me, they are taking the money from the proactive people and giving it to those on benefits.

‘As I watched the budget I didn’t know whether to laugh or cry because this government is doing exactly what I said it would when they came to power – it’s taking the country back to the 1970s.

‘No socialist government has ever worked anywhere in the world and this one is proving an abject failure.

‘In a sense, though, it’s good because the country needs a reset and thanks to the actions of Starmer’s Labour we are probably going to get one.’

Further along the lakeside Phil Routledge, 75, is waiting to find out whether or not his magnificent lakeside home will mean his coffers are raided.

Mr Routledge, who made his money selling forklift trucks in his native Merseyside, said: ‘There’s a good chance that our property will be valued at £2m so we will probably have to pay this new tax.

‘When they announced it in the budget I immediately started to wonder how they would go about classifying which property is worth £2m, it seems a massive task which would mean people visiting each individual home to value it.

‘We’ve spent a lot of time and money doing up our home to a good standard but there are properties of a similar size nearby which would be valued at less. You’d have to go inside to make an accurate assessment.

‘We’re in the fortunate position of being able to afford the £2,500 a year, but there will be people, especially in London, who are in £2m homes who don’t have that pare money to hand over to the government.

‘We bought this place as a holiday home initially, it was a second home but we decided to move up here and enjoy this beautiful scenery that we’re lucky enough to look out onto.’

A third homeowner, who declined to be named, is expecting to have to pay the mansion tax on top of the second home charge.

He said: ‘I now have to pay double the council tax because we use our property in the Lakes as a second home for weekends when we come up from Manchester.

‘I expect this house and our main residence will be subject to the mansion tax – so with second home tax and two lots of mansion tax to pay I expect to be around £12,000 a year worse off.

‘It’s absolutely scandalous that Labour has come after people like me who have worked hard and done well, it’s a penalty for having the nerve to become wealthy.’

It was a different story in the less well-heeled parts of Windermere as locals said that affordable housing should be the local authority’s number one priority, with some forced to stay in rooms in B and Bs just so they can continue to work in the town.

And there was anger that while rows of millionaires’ mansions appear along prime lakeside locations, staff in shops and cafes are struggling to pay stiff monthly rents for single room bedsits.

Quiet streets of quaint homes are taken over by holiday rentals with names like Tizzie Whizie Cottage and Herdy Hollow – recognisable by the coded key boxes installed beside brightly painted front doors.

Cafe manager Katie Williams, born and bred in Windermere, has no issue with the council pursuing anti pollution policies.

But Katie, 24, said: ‘The number one priority has to be building affordable housing for local people because for people like me and my generation any thought of owning a home in the place where we were brought up is just impossible.

‘It should be the most important thing and it doesn’t feel as though it is, we have been forgotten about.

‘A three bedroom house would cost about £1,500 in rent and most small flats are £900-a-month, which is way out of reach for people in hospitality jobs.

‘I pay £600 for a flat in Kendal, which is well outside Windermere. It’s a small one bedroom flat and the council tax is £200 a month.

‘It makes it a real struggle for me. The council has doubled council tax for second home owners and it’s right that the people with most money should pay more.

‘But they’re not doing enough for local people, those who were born here like me.

‘My dad and I had to move out of our rented home because the landlord wanted to sell it and I spent some time in a B and B where the owners had rooms for rent to locals.

‘It was strange living in a hotel but it meant I had more money and didn’t need to spend money commuting into Windermere to do my job.’

Carol Sharp is headmistress of Hawkshead Esthwaite Primary School in Hawkshead, 10 miles from Windermere.

In recent years she has seen her pupil role fall to just 30 and Mrs Sharp has had to split her role to be head of another small primary school in the north of Cumbria to make both schools viable.

She said: ‘More than half the residential houses in Hawkshead are Airbnbs or second homes and it’s obvious that is going to effect a school like ours badly.

‘The average house price in our village is £850,000 and that is beyond the majority of local people so they have to move away.

‘It means the village is dead, especially out of season, when all those expensive homes are sitting empty. For us that means we have 30 pupils when we should be running at around twice that number.

‘I have taken on a role as executive head of Penruddock School, for no extra money, just to keep both schools sustainable.

‘Until the issue of affordable housing is tackled properly it is only going to get worse and we’ll see schools like Hawkshead closing.

‘We’re seeing places where local people used to live, buildings on large farms for instance, turned over to be used as tourist rentals. The places where local people can afford to live are dwindling all the time.’

Paul Carrier, 88, a retired marketing executive in the chemical industry, has watched in dismay as some of Windermere’s most beautiful views have become dotted with the mansions of the wealthy.

He said: ‘It makes me so angry to see these places being built in prime locations that were once the most beautiful views along the length of the lake.

‘It seems that those with the most money are able to build whatever they want wherever they want while local people are forced to move out of the places where they were brought up.

‘We have very wealthy business people and top footballers rumoured to have enormous and incredibly expensive homes here which sit empty for the majority of the year.

‘I was born in Liverpool and worked in Buckinghamshire, but I retired here in the late nineties. I’m afraid I’ve seen mostly changes here that I don’t like. The roads are crowded and I hate the roar of motorbikes.’

Paige Mather, 29, works at a Windermere letting agency and has seen second homes going on the market.

She said: ‘A lot of people have been putting their second homes here on the market because the council tax rise is just too much for them.

‘But many aren’t selling. People are aware of the tax so are resisting buying a second home even if they can afford it and the houses are just too expensive for ordinary local people.

‘For someone like me who earns minimum wage it is impossible to live in Windermere, as much as my partner and I would love to.

‘Instead we live in Kendal, which is outside the national park but is still really expensive. It costs £8.50 to get the train into Windermere, which is a lot just to get to work every days considering it’s a short journey.’

Windermere butcher Jonathan Turner said holiday rental should be paying the same elevated business rates as the high street shop he manages.

Jonathan, 36, said: ‘They should be paying the same as us for commercial waste collection but they don’t. You see them coming out and placing piles of rubbish into public bins on streets. It isn’t fair on local people or businesses.’

Second home owners say that the tax hike could have an adverse effect on the Lake District economy because they have less to spend.

Rob Nicholls, who has a second home in Ambleside, said: ‘We haven’t got limitless funds, so we’ve changed our habits. Now we bring all our food and drink with us and cook in the cottage instead of going out.

‘We used to eat out regularly – now we don’t go out for £70 or £100 meals. We might nip out for breakfast occasionally but that’s it. Our budget hasn’t changed but how we live when we come here has. We just pack the car with everything and bring it with us.’

A spokesman for Westmorland and Furness Council explained its second homes tax hike to the Mail ahead of the controversial budget. 

A spokesperson said: ‘High levels of second home ownership can have negative consequences for local communities and major implications for community sustainability – when there are not enough people in a community to keep services and community support networks going.

‘It also reduces available housing stock, for sale and rent, and drives up house prices for local people.

‘In 2023, there were a total of 5,440 second homes in Westmorland and Furness, representing 4.7 per cent of the total number of homes. 

‘However, there are many parts of our area where second homes make up a much larger proportion of the housing stock – for example,14 per cent in Windermere, 25 per cent in Patterdale and more than 20 per cent in the Lake District as a whole.

‘This level of second homes and holiday lets is hollowing out communities. It is imperative that we take the action necessary to stop the situation getting even more severe, and to avoid other communities being lost to holiday homes.

‘With a significant proportion of the population absent for large parts of the year, especially in winter, it can also make it more expensive and difficult for councils and businesses to provide the local services residents expect.

‘In recognition of the issues, in the Levelling Up and Regeneration Act 2023, councils were granted the discretion to charge additional council tax of up to 100 per cent on furnished homes not used as a sole or main residence.’