Your holiday, our home?

Your holiday, our home?

Wales and South West England saw both the largest increase in holiday home ownership and the largest rise in rents over the course of the pandemic, according to our latest research.

Thousands of properties in Wales and South West England were bought as holiday homes or switched from the private rented sector between March 2020 and August 2021. In the same period rental listings halved, sending rents surging by 17% and 16% respectively.

We are calling for government action to bring properties back into the residential market, including scrapping mortgage tax relief for holiday lets, and powers for councils to license holiday lets and charge additional council tax on homes that are not primary residences.

Holiday homes can either be registered as second homes for council tax, or commercial holiday lets for business rates. We found the combined total of these properties in South West England rose from 73,344 to 76,331 between 2020 and 2021, a 4% increase. In Wales, the number of second homes and commercial holiday lets increased from 31,779 to 33,474 in the same period.

According to Zoopla data we analysed, the number of rental listings in South West England fell from 12,578 in February 2020 to 6,316 in July 2021, while the average weekly rent rose from £206 to £238. In Wales, listings on Zoopla fell from 7,237 to 3,143 in the same period, with the average rent rising from £155 to £181.

There are 301,221 second homes, with 66% estimated to be used as holiday homes, and 94,928 commercial holiday lets in Great Britain as a whole, and they are concentrated in London, Scotland, Wales and South West England. Just 40 councils contain half of Great Britain’s second homes – councils that need to do more to help local residents.

This map shows the percentage of each local area’s housing that is registered as second homes 

London’s holiday let market crashed in 2020 and did not recover in 2021 due to restrictions on international travel. The number of second homes and commercial holiday lets there fell by 4,688, or 9%. Residential rental listings nearly doubled from 68,699 in February 2020 to 132,885 in August 2020, and market rents dropped by 25%, from £799 per week to £572 by February 2021. In late 2021 this trend has reversed.

At present, landlords can claim tax relief on mortgage interest paid on holiday lets but not residential tenancies. In January the government announced new requirements for holiday let operators to register for business rates and thereby qualify for small business rate relief instead of paying council tax on a second home.

In the Levelling Up and Regeneration Bill, councils will be given powers to apply a premium of up to 100% on council tax for second homes – but holiday lets can still avoid paying tax. The Department for Culture, Media and Sport has said it will consult on a register of tourist accommodation – but that was nearly a year ago.

The popularity of domestic holidays last year, combined with the lack of regulation and tax advantages has fuelled the appetite for holiday homes and deprived renters of places to live. We’ve heard countless stories of people being evicted so their landlord could start renting to tourists.

Taking homes out of the residential market prices out people who want to settle down in the place they grew up. That destroys communities and starves local businesses of workers.

The government must step in to incentivise landlords to let to tenants instead of tourists. This involves removing tax advantages from holiday lets, and giving councils powers to license holiday lets and impose substantial council tax premiums on holiday homes. Only by acting can the government ensure that homes are available across the UK for the residents who so desperately need them.

Sign our petition to close the holiday let tax loophole


The Guardian


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