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Addressing the challenges of short-term lets and second homes

Perspectives from Wales, Scotland and England

This blog has been jointly written by RTPI colleagues including Jenny Divine, Research Officer, Roisin Willmott, Director of Wales and Northern Ireland and Planning Aid England, and Robbie Calvert, Policy, Practice and Research Officer. 

Pressure on housing is a well-documented issue and there are many factors contributing to this. The spiralling use of housing for short-term holiday lets and second homes, particularly in rural areas, is one such factor and has become the subject of controversy across the UK, evoking strong opinions for and against.

A three-pronged approach to address the impact of second home ownership and holiday lets on Wales’ communities is being followed by Welsh Government.  This focuses 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. In 2022, Welsh Government introduced a maximum level of council tax premiums for second homes, as well as new local tax rules for holiday lets.  There has also been a consultation on planning legislation and policy for second homes and short-term holiday lets.  The RTPI published a paper discussing the various options for planning to address the management of holiday homes in Wales

In Scotland focus has predominantly been on the regulation of short-term lets with the recent introduction of a licensing regime and the enabling provisions for planning authorities to designate all or part of their area as a short-term let control area. In a STL control area, change of use of a dwellinghouse will always require planning permission. The policy objectives of this regulation are to help manage areas with high concentrations of secondary lettings, restrict or prevent their development in ill-suited places or types of building and to help local authorities manage their area’s housing stock to best effect. This is likely to have an impact on both urban and rural Scotland with consultations currently underway for the establishment of STL control areas in both the City of Edinburgh and the rural Badenoch and Strathspey ward of the Highland Council. Whilst many commentators welcome the recent steps made towards a more effective system of regulating short-term lets, some planning authorities have voiced significant concerns over the resources needed to process a potential surge of applications and enforce potential planning breaches.

England has perhaps been somewhat behind Wales and Scotland when it comes to acting on second homes and holiday lets. But tensions around this issue are heightening, and it appears that the tide may be turning. Whitby residents recently voted to ban new build and additional homes for use as anything other than principal residences. Brighton is set to follow, with councillors voting to explore proposals that would ban new-build second homes and holiday lets. Action is also being taken at the national level; Michael Gove having recently announced closure of the council tax loophole that second homeowners have thus far enjoyed. From April 2023, to benefit from the holiday let tax relief, second homeowners will be required to prove that their second homes are in fact being rented out as holiday lets for a minimum of 70 days a year. The Levelling Up and Regeneration Bill also introduces new opportunities for a clamp down, with many councils viewing devolution deals as a way to increase their powers to restrict second homeownership. The Bill also brings in a discretionary council tax premium of up to 100% on second homes and homes that have been empty for more than a year.

This issue is further explored in the RTPI’s Rural Planning in the 2020s research project. This project identifies and examines the challenges facing rural communities throughout the UK and in Ireland in the 2020s, the findings of which are now available on the RTPI website.

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