Bid to overturn holiday lets rule fails in Senedd
AN ATTEMPT to derail new occupancy criteria for holiday lets in Wales has been defeated in the Senedd. However the Welsh Government said it is considering allowing some exemptions and concessions for business owners who cannot meet the 182-day letting threshold through no fault of their own.
A new occupancy rule, due next April, was introduced by the Welsh Government as one element of its campaign to tackle Wales’ housing crisis. It has caused panic within the Welsh tourism sector amid claims that 30% of holiday lets will be forced to close.
The Welsh Conservatives have long opposed the changes, believing them anti-business, and the party yesterday led a motion to annul the relevant regulation.
Plaid Cymru held firm, claiming it was “fundamentally wrong” that thousands of people were deprived of a home because short-term let investors were piling into an unregulated market and driving up housing prices in holiday hotspots.
Shadow tourism minister Tom Giffard, who initiated the Senedd debate, said Welsh holiday let owners were now facing a “triple whammy” of punitive changes.
As well as being forced to take six months worth of bookings each year, and face council tax premiums of up to 300% if they don’t, they were also braced for a potential tourism tax, he said.
“This change in legislation has the potential to have a hugely profound impact on the self-catering industry across our country,” he said.
“This all-Wales, one size fits all approach takes no account of the different kinds of businesses that operate in a seasonal Welsh tourism year.”
Tory Senedd members support a 50% increase in lettings, from 70 to 105 days each year, to bring affected properties in line with HM Revenue and Customs requirements. However Cardiff is insisting properties are let for 182 days to qualify for business rates, and avoid hefty council charges.
This represents a “massive” increase of 160%, said Mr Giffard, who noted that only nine respondents to the Welsh Government consultation had supported such a hike – less than 1% of the total number of replies.
North Wales MS Sam Rowlands claimed that businesses unable to meet the “ridiculous” occupancy threshold will incur an annual tax bill of around £6,000.
Another North Wales MS, Mark Isherwood, insisted it will be local people who suffer the most.
He said: “Every business that’s contacted me – and there have been hundreds – is a local Welsh person, except one, who was born in Gwynedd, is a Welsh language speaker, but is away with the army and has kept his home to come back to when he leaves the army and during his holidays.”
The point was re-iterated by James Evans, Tory MS for Brecon and Radnorshire, who said genuine holiday businesses were being “punished” by the lack of new houses being built in Wales. He said the new criteria will lead to a rash of property sales – but these won’t go to local people.
“I have seen in my constituency holiday lets coming back on the market as people are off-loading them for £400,000,” he said.
“I’d like to know how the minister can think that local young people can magic up £400,000, because I can assure you that people in my constituency can’t.”
Rebecca Evans, Minister for Finance and Local Government, said doing nothing was not an option in a country where in some communities 40% of properties are second homes.
“We know that for large parts of the year, in some areas, the lights will be out,” she said, adding: “Striking that balance between those in the more casual end of the sector and those that are established businesses is important. Work on registration will be important in doing that, so that we can move people towards the more established businesses and support them to have those properties let for a larger number of nights of the year.”
Ms Evans said she will be issuing revised guidance on additional options available if self-catering properties are restricted by planning conditions and so can’t meet the 182-day thresholds.
But Tory MS James Evans said: “The Welsh Government encouraged farm businesses to diversify and now the Welsh Government has pulled the rug from under them. What about the holiday lets that are used for charity groups?”
Pinning the blame on rental platforms like Airbnb, Mabon ap Gwynfor, Plaid MS for Dwyfor Meirionnydd, said they were undermining legitimate accommodation businesses and had to be reined in.
He added: “I think most rational people would agree that there is something fundamentally wrong about a situation where thousands of my constituents – key workers, nurses, firefighters, shop workers, council workers – live in unacceptable conditions or can’t access a home at all locally, while those who can afford a second home in those communities can play the system for their own benefit while more and more homes in residential areas are lost, to be used as Airbnbs and so on.”