Welsh government to clamp down on second homes and holiday lets

It has long been argued by some opposition groups that local people in rural and tourist areas of Wales are being deprived of a place to live as demand for second homes and short-term holiday lets continues to grow.

Julie James (right).

More than 5,000 people signed a petition earlier this year calling on the Welsh government to intervene and change planning rules to “ensure community control of the housing market”.

The government now looks set to act.

In the Senedd later today, Julie James, the minister for climate change, who is responsible for housing, will set out an “ambitious three-pronged approach” to address the impact of second home ownership on Wales’ communities.

She is expected to argue that the new plan ‘has fairness at its heart’ – ensuring that everyone in Wales ‘can have access to good quality, affordable housing’.

The three-pronged approach will focus on:

Support – addressing affordability and availability of housing,

regulatory framework and system – covering planning law and the introduction of a statutory registration scheme for holiday accommodation; and

a fairer contribution – using national and local taxation systems to ensure second home owners make a fair and effective contribution to the communities in which they buy.

There will also be a pilot area in Wales – to be decided over the summer – where these new measures will be trialled and evaluated before being considered for wider rollout.

Other supporting actions, including the work on a registration scheme for all holiday accommodation and a consultation on changes to local taxes to manage the impact of second homes and self-catered accommodation, will also begin over the summer.

A Welsh Language Community Housing Plan, to protect the particular interests of Welsh language communities, will be published for consultation in the autumn.

Last year, Wales became the only country in the UK to give local authorities the power to charge 100% council tax increase on second homes.

James said: “The continuing rise of house prices mean people, especially younger generations, can no longer afford to live in the communities they have grown up in. A high concentration of second homes or holiday lets can have a very detrimental impact on small communities, and in some areas could compromise the Welsh language being spoken at a community level.

“We have already taken strides on some of these issues – last year we became the only nation in the UK to give local authorities the power to introduce a 100% council tax levy on second homes. But the urgency and gravity of this situation calls for further intervention, which means real and ambitious actions are delivered at pace, to inject fairness back into the housing system.

“Taking recommendations from Dr Brooks’ report, our new three-pronged approach will kick-start a summer of action which will determine how we tackle this issue now and into the future. I am calling on all political parties across the Senedd to get involved in this, as we look to empower our communities to exercise their right to live in good quality homes, wherever they are in Wales.”

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6 Comments

  1. Hillofwad71

    They have been particuarly slow to address this problem

     

    Second  homers have been able to exploit an anomaly which actually advantages them over local owner -occupiers  . If they meet certain criteria  they are able to register their homes as a small business

     

     

    Amongst other benefits this   entitles  them to gaim small business tax relief which means they pay no rates at all unlike a local owner  occupier   who pays the full whack

     

    Paying absolutely zero into the local communities. During COVID also managed to  trouser grants too

    This of course puts them at a distinct  financial  advantage over and above  locals when bidding for the same property

    This has been brought to the attention  of the   authorities sometime ago but despite the uproar  have had little appetite for change

     

    A case of too little,too late

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  2. paulgbar666

    Big problem is lots of these 2nd homeowners bring vital employment.   So if 2nd homeownership is effectively prevented who will buy them?
     
    The unemployed can’t get mortgages!!!   Tourists bring their spending money. They have to stay somewhere!   Like with S24 I can see Govt abolishing the small business reliefs for FHL.   Govt policy is to prevent 2nd home ownership of any sort. That was why S24 was imposed.   Politically Govt will eventually act against these 2nd homeowners.   It is unlikely it will result in them selling up. But it will provide more Council Tax. Few will object to that apart from the 2nd homeowners.   The FHL tax loophole doesn’t sit right. I can see it being abolished.    

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    1. Hillofwad71

      Sure nothing wrong with the idea of second homes

       

      However allowing tax benefits which doesnt create a level playing field with an owner occupier is pushing it Financially advantaged to pay  more for the same property

       

      I think you are labouring under a misunderstanding about employment issues In the highly sought after areas on the Welsh coast for example you cant get a trade for love or money all fully booked up  Second homers are  having to bring in  outside help

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    2. LVW4

      I don’t know enough, but it does appear owners of holiday lets in Wales have had an unfair financial advantage over owner occupiers, and above the taxation advantages they already have over BTL. I don’t have a problem with removing any ‘local’ advantages, but I worry that the politicians will, as usual, react without considering the unintended consequences, as with S24.

      I have had quite a bit of holiday let experience in the past, and am considering dabbling again later this year.

      The reality is the properties typically bought for holiday letting need to be high quality in order to justify the price tag and to remain competitive in a highly competitive market. This means they are often beyond the financial means of the local population. However, what holiday letting and second home ownership bring is employment. Lots of work for everyone. It seems there is an expensive job needing to be done every few weeks. Repairs and maintenance. Annual decorating. Furnishing. Building. Gardening. Cleaning. Property management. Beehive removal! And then there’s the significant spend on local amenities. Shops, restaurants, pubs, tourist attractions….

      This feels like Wales is about to shoot itself in both feet. As for damaging the Welsh language… I’ll say no more.

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  3. Woodentop

    Looney left at its worst.

     

    Wales controlled by Labour has been running their country into the ground for decades. Properties are cheap in Wales compared to England for a very good reason, lack of enterprise support to business’s that makes a real difference to the local economies. Any good jobs are over the border in England, as seen by the traffic morning and evening and looking around to buy anything in Wales.

     

    Consequences are that lack of and low salaries created the mess they are in and those with extra money in a free world, can purchase what they can afford. You have the same issues in England with commuter belts/house prices and locals having difficulty in affording.

     

    They already increased second homes council tax an extra 50%, Land Transaction Tax (new name for stamp duty) starts at 4% increasing to 16% and brought in Lettings licensing which has created an exodus and just about stopped any future new rental properties within the PRS, except for the dribbs and drabs by anyone with money living in Wales (few).

     

    They are decreasing property stock with the looney socialist idea of stop Captialism and now unable to house people and that is on top of years of blackmailing builders to sell a % of new builds to housing associations. It did help affordability for some FTB.

     

    If Wales wants to improve, taxing those that create growth is not the way. It is counter productive. England doesn’t have to go to Wales to invest but Wales need them to.

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  4. Hillofwad71

    Woodentop   To be fair the 3 points  she is addressing are all valid in the 3 pronged approach  
     
    The areas where holiday homes are mainly rural in relatively  sparsely populated areas .Plaid Cymru the dominant political  force at local level Many are engaged in agriclture where wages are comparatively low at  worker level  where affordable housing is required
     
      Certainly agree that  kiling off second homes is not the way forward to provide  extra  affordable housing that can  be achieved by proxy at planning level
     
    Excessive taxation too  is the wrong way to go but “fair and reasonable” sits OK with me  but as pointed out 2nd homers are circumventing this by registering as small businesses s and are financailly advantaged which is the extreme opposite and can’t be right  .
     
    The market  has shown no let up in demand for second homes  or investment  for BTLs  There is an acute shortage of rental stock  in West Wales for example  to satisfy 
     
    Licencing I am open minded on that one if it achieves a fair balance  betweeen  both parties
     
      My experience as a lanldord in Wales has been a happy one        

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