A seaside town drawing up a Neighbourhood Plan is likely to ban the building of any second homes.

St Ives, in Cornwall, will issue a referendum next April to all 12,000 residents asking them to agree to a ban on building any homes other than principal residences.

Lynton and Lynmouth in Devon has set the precedent by stopping the development of new homes in its area.

Lucy Davis, who is co-ordinating the Neighbourhood Plan in St Ives, said: “People have been talking about this for decades and now we have the opportunity to do something.”

The move, made possible under the Localism Act, is backed by the local MP, Lib Dem Andrew George.

He had proposed introducing clauses into his Affordable Homes Bill to put a cap on second homes in places like West Cornwall and the Isles of Scilly, but after running into opposition from both the Tories and Labour, had to withdraw that clause.

George said: “The last time the Conservatives were in power they introduced a massive multi-million pound council tax discount for second-home owners. Much, but not all, of this has been removed but there are still massive financial incentives for second-home owners.

“It is telling that if you are wealthy and under-occupy your second home, the Conservatives reward you. If you are poor and under-occupy your council house, they penalise you.

“Many second-home owners are taking advantage of a loophole which allows them to register for business rates and then take advantage of the Small Business Rate Relief which means they pay either nothing or very little at all.

“They can also take advantage of marketing their cottages without charging VAT as they fall below that threshold – to the disadvantage of legitimate holiday businesses like larger guest houses and hotels.

“Second-home ownership is having a devastating impact on communities like St Ives.

“I am surprised and disappointed that both Labour and Conservative Parties are so implacably opposed to the introduction of sensible regulations to help communities like St Ives better manage their housing stock to give local families a better chance in the marketplace and to protect the life of our local communities.”