THE news that the Government has abolished automatic community tax reduction on second homes could net councils in the North-East up to £4m.

Whitehall proposes giving councils in England the choice to apply council tax discounts of between 10pc and 50pc for second homes. Currently, second home owners have an automatic entitlement to a 50pc discount. Councils will also be able to end discounts for long-term properties immediately.

But the reduction in the concessions to second and holiday home owners will not necessarily solve all the problems of high house prices in some areas such as Teesdale and the North York Moors and Yorkshire Dales national parks, which have large numbers of such properties.

But in other areas, it could provide money to build affordable housing.

Local authorities will be allowed to keep the extra community tax to improve local services.

The move is also intended to create an incentive in urban areas to bring derelict and rundown properties back into use. In such long-term empty properties, councils will be allowed to end discounts altogether.

At Teesdale Council, director of finance, Sian Hansom, said: "Overall we are glad we have been given this discretion. But we realise we will not get all the extra money - it will have to be shared with, say, the county council and such services as the police.

"Even so, we are supportive of the proposal and will work alongside the county council."

For Hambleton District Council, Coun Arthur Barker, spokesman for finance, said: "We don't have many second homes which are holiday homes in our area so it is not much of a problem. The move, though, will encourage owners of empty houses to put them back in order and on to the market.

"We welcome the move by the Government to give the council discretion to decide what the discount will be and how to spend the extra money."

Richmondshire District Council has been at the forefront of lobbying the Government for such a move.

Coun John Blackie, council leader, said this was outstandingly good news and the move could link up with affordable housing.

"In Richmondshire, we have a large amount of second home owners which is forcing up the price of houses and making it impossible for young people or those working in the area to get a step on the property ladder."

Helen Schroeder, chairman of the North York Moors National Park, said she approved of the move in principle.

"Although the park is not a community tax gatherer, we do have the problem of affordable housing and many second home owners. I am not against people who can afford having a second home in the park, but I believe they should contribute to the economy."

She did not think the move would have much effect in the short term