THE scrapping of a pension scheme that would have given people investing in second homes a substantial tax break has been welcomed across South Lakeland.

Chancellor Gordon Brown announced during his pre-budget speech on Monday that property Self Invested Personal Pensions would not be introduced as planned in April next year.

Property SIPPs would have given savers a 40 per cent tax break on the price of a second property.

The scheme led to fears that increasing numbers of second home-owners in South Lakeland would price out local people.

Long-standing campaigner on affordable and second homes Coun Stan Collins welcomed the change of heart.

"In a difficult housing market property SIPPs would have tipped the balance even further away from local people," said the South Lakeland district councillor for Staveley.

"It would also have created a huge hole in the Chancellor's finances which could only have been made up by increased taxation or reduced spending on essential services.

"Following on from the cutting of the council tax discount for the owners of second homes, this may mean that the Government is at last getting the message about the housing needs of rural areas."

Westmorland and Lonsdale MP Tim Farron, whose maiden speech in Parliament expressed concerns over housing need in the constituency, shared his delight as did Yorkshire Dales National Park Authority chief executive David Butterworth who lobbied rural affairs minister Jim Knight over the issue. Of the 10,300 homes in the park, 15 per cent are registered second homes or holiday lets.

However, the National Association of Estate Agents admitted being shocked and stunned by the decision.

NAEA chief executive Peter Bolton King said: "We are disappointed that all the time and money spent on preparing and discussing the implications of SIPPs has now been wasted."

The decision has also come as a bitter blow to the newly-formed Association of Second Homeowners, established to represent the quarter of a million second homeowners in the UK and provide them with a voice to fight back against MPs and rural pressure groups.

"We are seen as an easy target," said association chairman Paul Rouse.