The data from Purplebricks reveals enquiries over the last six months for homes with self-contained annexes reached 10,000, coinciding with many council's raising council tax on second homes
Demand for self-contained annexes rose from August 2023 to January 2024 with over 10,000 enquiries, according to Purplebricks(Image credit: Getty Images)
There has been a reported surge in interest in homes with self-contained annexes, also known as 'granny flats', following a rise in council tax on second homes.
The data from Purplebricks reveals there was a six-month record rise in enquiries in homes with self-contained annexes with the rise coinciding with councils raising the rates of council tax for second homes by as much as 300%.
We take a look at the benefits of self-contained annexes, how they can be used to raise house prices and why people are looking at them as a way to get around the clampdown on second homes.
10,000 enquiries in homes with self-contained annexes
There has been a surge in interest in homes with self-contained annexes, according to a report from Purplebricks, the online estate agents.
From August 2023 to January 2024 there were a recorded 10,000 enquiries in homes with 'granny flats'.
Purplebricks CEO Sam Mitchell said: "The rise of interest in annexes is a clear sign Brits are looking much closer to home when it comes to investing in property."
Rising council tax spurs interest in annexes
Part of the reason for the increased interest in homes with annexes is the increase in council tax on second homes.
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The Welsh Government from April 2023 allowed councils to tax second homes by up to 300% in order to tackle the number of second and empty homes in Wales.
Rebecca Evans, minister for finance and local government, said: "The changes to the local tax system form one strand of a wider package of measures being introduced – encompassing the planning, property and taxation systems – to address the impact of second homes and unaffordable housing affecting many communities in Wales.
"Ultimately, these changes are about fairness. We want to ensure councils have the powers available to them to strike the right balance in local housing supply."
The Scottish Government has introduced their own plans for doubling council tax for second homes from April this year.
Meanwhile Cornwall Council has also announced a 4.99% rise in council tax for their 2024/25 budget in an attempt to stop the rise in second home purchases.
The demand for self-contained annexes coincided with the introduction of council tax raises by a number of councils (Image credit: Simon Maxwell)
What are the benefits of annexes?
Annexes can increase the value of your home by up to 20%-30% according to CheckaTrade as well as providing an additional source of income by being rented out to holiday goers.
However, annexes also offer additional living spaces that can be used for an office, gym, or even additional bedroom.
Additionally most councils give a 50% discount on council tax for annexes lived in by relatives and it is exempt from council tax if it is occupied by someone aged over 65 or is disabled.
Mitchell added: "A so-called granny flat could be the cash-smart solution for families wanting to take care of an elderly relative, while protecting their independence.
"With second home owners facing uncertainty, it seems savvy home-hunters have spotted a clever way to have the best of both worlds."
Although self-contained annexes can raise the value of your property it is crucial to see if you need planning permission for an annexe on your land(Image credit: Nicholas Yarsley)
How much is an annexe?
The average cost of an annexe is around £90,000 according to CheckaTrade, although this cost can be reduced to £40,675 if you're buying a prefabricated annexe or to £13,750 if you're converting from a garage.
News Editor Joseph has previously written for Today’s Media and Chambers & Partners, focusing on news for conveyancers and industry professionals. Joseph has just started his own self build project, building his own home on his family’s farm with planning permission for a timber frame, three-bedroom house in a one-acre field. The foundation work has already begun and he hopes to have the home built in the next year. Prior to this he renovated his family's home as well as doing several DIY projects, including installing a shower, building sheds, and livestock fences and shelters for the farm’s animals. Outside of homebuilding, Joseph loves rugby and has written for Rugby World, the world’s largest rugby magazine.
