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UK: The holiday let industry is setting out to expose the “rampant hypocrisy” at the heart of attacks on the sector as new research reveals that empty homes outnumber holiday lets in the majority of UK local authorities.
With housing shortages across the country, holiday lets can often be scapegoated or blamed for hoovering up properties in desirable locations.
However, analysis of 313 UK local authority areas showed that 58 per cent of them actually have more homes sitting vacant long term than holiday lets, according to a study by the UK Short Term Accommodation Association [STAA] and holiday home data provider Key Data.
According to the STAA, the blame game shows a “misunderstanding” of holiday lets’ value to local communities, their offering of authentic local experiences and their responsibility for attracting significant amounts of spending to local businesses. Meanwhile, vacant homes sometimes sit empty for years, not to the benefit of communities, much like unlet second homes, which sit empty most of the year.
Looking at touristic areas, the worst affected is Arun Borough, which includes the popular seaside town of Bognor Regis. The research shows that there are more than 400 long-term empty homes in the local authority, 6.7 times more than the 66 holiday lets in the area.
Even in Wales and Scotland — the scene of some of the most aggressive moves to introduce new regulation and taxes for holiday lets — the numbers of empty homes dwarf the size of the holiday let market.
Welsh councils like Caerphilly and the valleys of Rhondda Cynon Taf have over five times more empty homes than holiday lets, while the Highlands in Scotland have 4.4 times as many.
The biggest difference in raw numbers was in Aberdeen, where there are 4,370 more empty homes than holiday lets —4.6 times more. These are thousands of properties that bring no value to the local community in Scotland’s third largest city.
Top 20 UK tourist destinations with more empty homes than holiday lets [notable local tourist destinations in brackets]
The “scourge” of empty homes highlights the flaw at the centre of Britain’s housing market, according to the STAA. While many owners are wealthy enough to simply keep their properties empty, or are happy to bide their time waiting for valuations to provide them with a better return, there are few incentives to rent out or sell up, despite moves by some councils to punish long-term empty homes with tax premiums, which often fail to encourage owners to bring properties back into full-time use.
Holiday lets, on the other hand, bring in sizeable amounts of revenue for communities, many of which are not well served by hotels. An Oxford Economics report found that in 2021, the short-term let sector brought in £27.7 billion to GDP [gross domestic profit], and supported almost half a million jobs. Despite this, new measures mean that holiday lets can be subject to similar tax premiums as long-term vacant homes.
There are currently 330,325 long-term empty homes in England, Scotland and Wales according to latest official figures.
Andy Fenner, CEO of the UK Short Term Accommodation Association [STAA], said: “Holiday lets have been taking the blame for the housing crisis for a long time but this research reveals the true picture.
“We all need somewhere to live and we all need somewhere to work. This research shows that holiday lets are not to blame for the housing crisis, but rather the blame lies with councils allowing homes to sit idle. Holiday lets create much-needed jobs in communities up and down the country, empty homes produce nothing.
“Most councils are sitting on so many long-term empty homes that they eclipse the numbers of holiday lets in their area. This is where policymakers should be looking to solve the housing crisis, not scapegoating an industry responsible for jobs and investment in areas that often have nothing else.
“This is rampant hypocrisy when councils across the UK are being encouraged to strangle this industry with council tax surcharges, planning requirements and licensing schemes. Empty homes benefit no one, and can even have negative effects on neighbours and local communities when left unattended and in disrepair, while short-term lets are a vibrant part of our tourist industry, bringing in visitors from around the world.
“The way people are being demonised for letting out their homes to families who want to enjoy a holiday in the UK is outrageous, especially while empty homes are barely talked about as a problem. The housing crisis is a complex issue, and it cannot be solved overnight, but making use of our existing housing stock would be a great place to start.
“Tourism is something we should be proud of and encourage. This country has amazing cities, beautiful countryside and world class visitor attractions. Holiday lets allow people to explore all that this country has to offer. We should be helping them and protecting the thousands of jobs they support,” he added.
Earlier this year, HM Revenue & Customs [HMRC] announced a renewed crackdown on holiday lets investment after it was revealed that the tax authority had opened almost 2,000 investigations into landlords letting out their properties via short-term rental platforms over the last tax year. According to HMRC, the latest figures were five times the 375 investigations that were held in the previous year [2022-2023] and 20 times up on the 95 investigations in 2021-2022, as per official data.
In March, Chancellor Jeremy Hunt’s Spring Budget abolished the furnished holiday lettings tax regime, thereby scrapping tax relief for holiday lets, in a bid to improve the availability of long-term rentals in the UK. Mr Hunt warned that the regime until that point had created a “distortion” where there are not enough properties for long-term rental by local people in their communities.
The preferential tax regime for holiday lets, which includes income tax reliefs for costs incurred from furnishing properties and the ability to reduce capital gains tax in certain circumstances, will be a nationwide measure across the UK and take effect from April 2025. According to a recent report in The Sunday Times, the scrapping of tax reliefs on furnished holiday lets could bring in an additional £300 million a year for the Treasury.
Michael Gove, the former Secretary of State for Levelling Up, Housing and Communities, last year pledged to bring forward restrictions for short-term lets across the UK as part of the government’s flagship Levelling Up and Regeneration Bill. Speaking in the House of Commons, he said that the proliferation of short-term holiday lets and Airbnb listings had been “impeding” the capacity of young workers to live and find jobs close to home, thereby preventing them from contributing to the local economy.
The government had been under pressure to meet mandatory, new-build housing targets of up to 300,000 new homes a year in the UK by the “mid-2020s”.
In May, UK Prime Minister Rishi Sunak called a general election to be held on Thursday 4 July.
