HOLIDAY HOME BOOM
Research suggests rents have increased most in tourist hotspots
PARTS of the UK that have witnessed a surge in holiday homes during the pandemic have also seen some of the harshest rent hikes. That’s according to research by campaign group Generation Rent that suggests the high numbers of second homes and commercial holiday lets are pricing out local tenants.
For example, Wales had a combined 33,474 of these types of property as of August 2021, up 5% from 31,779 in March 2020.
That was driven by a big increase in the number of registered holiday lets, which rose 38% from 6,906 to 9,500.
Meanwhile, analysis of Zoopla data shows rental listings more than halved from 7,237 to 3,143 between February 2020 and July 2021, a sharper drop than anywhere else in Britain.
Over the same period, average weekly rents went up by 17% from £155 to £181, which was the steepest rise
A similar pattern was seen in the South West of England, where the number of second homes and commercial holiday lets grew 4% from 73,344 to 76,331 – again driven by a rise in commercial lettings.
Rental listings in the region halved from 12,578 to 6,316 – the secondbiggest drop after Wales – sending weekly rents up 16% on average, from £206 to £238.
Soaring holiday home ownership in some popular UK tourist destinations has been driven by rising demand for domestic breaks after Covid-19 restricted international travel, making the staycation industry more lucrative.
Another issue is that landlords can currently claim tax relief on mortgage interest paid on holiday lets but not residential tenancies.
There are now 301,221 second homes across Britain – with just 40 council areas containing half of them – and 94,928 commercial holiday lets, according to Generation Rent.
Outside of Wales and the South West, other hotspots include London and Scotland.
Dan Wilson Craw, deputy director of Generation Rent, said: “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.”
Mr Craw said governments needed to incentivise landlords to let to tenants instead of tourists by removing tax advantages from holiday lets, giving councils powers to license them, and imposing substantial council tax premiums on holiday homes.
Wales has already introduced rules meaning second home owners could face four times the current level of council tax from next April, and has made it harder for holiday lets to be exempt from the tax.
A Welsh Government spokeswoman said ministers were also looking into proposals to create a right to adequate housing, potentially including rent controls in the private market to ensure they are affordable to local people.
Meanwhile, a Department for Levelling Up, Housing and Communities spokesperson said: “We’re taking tough action to prevent the negative impact that holiday lets and second homes can have on local communities – particularly in tourist areas across the South West – by closing tax loopholes on holiday lets and introducing council tax premiums on second homes.
“The South West is receiving £1 billion through the Affordable Homes Programme and since 2010 we have delivered 63,500 affordable homes in the South West.”
The UK Government faced criticism recently after it emerged that its £400 energy bills discount for every household would include second homes, meaning people with additional properties would get it more than once.