PLANS by the Government to allow people with self-invested pensions to buy second homes as part of their savings for retirement have caused serious concern in the Yorkshire Dales.

If the proposal goes ahead, people will be allowed to include buy-to-let investment property as part of their Self-Invested Personal pension (SIPP) pot.

This means higher income earners could receive a tax rebate of 40 per cent on the cost of a holiday or second home if they include buy-to-let investment schemes.

The move has already caused concern at the Yorkshire Dales National Park Authority, which earlier this year introduced proposals to change the rules on second home ownership.

The park's chief executive, David Butterworth, said a solution was needed that would not make it even harder for local people to find affordable homes in tourist areas.

"This policy would have a serious knock-on effect in the Yorkshire Dales National Park where the authority decided earlier this year to change the planning rules in an effort to provide more affordable housing for local people."

He said the Treasury would, in effect, negate everything the park authority had tried to do to help local people stay in the towns and villages where they were brought up by enabling them to afford their own homes.

"Of the 10,300 homes within the Yorkshire Dales National Park, 15 per cent are already registered as second homes or holiday lets.

"This proposal means that people with a decent amount of money to invest from their pensions will, in effect, receive a subsidy to buy the limited housing stock in attractive areas like the national park," he added.

Alison Leech, Craven District Council's housing strategy manager, said they were aware of the issue. "We will be keeping an eye on it and seeing how it goes," she added.

In July Margaret Beckett, Secretary of State for the Department of Environment, Food and Rural Affairs, announced the establishment of an Affordable Rural Housing Commission (ARHC) to identify practical ways to improve access to affordable housing for people in rural areas.

In an interview with Radio 4's Costing the Earth programme, ARHC chairman Elinor Goodman admitted the Chancellor's plans "on the face of it" seemed contrary to trying to keep prices down in the countryside.

A spokeswoman for Defra told the Herald: "The Government is clear that putting residential property into a SIPP will not be an appropriate investment for most people.

"If you decide to invest property into a SIPP you will have to sell the property to the pension fund, pay a tax charge to use the property, put any income from rent back into the pension fund and incur tax charges when the pension is paid.

"You may also have to sell the property on maturity of the pension fund.

"But ministers have made it abundantly clear throughout this process that we always stand ready to review any reform, if we feel it could pose a risk to our wider objectives on affordable housing."

Mr Butterworth added: "We intend to raise our concerns with the Commission and with Government ministers as soon as possible to ensure that the needs of small rural communities are met."