Second home and holiday let control plans outlined in Wales

Wales: The Welsh Government is planning to introduce controls to limit the numbers of second homes and holiday lets, as well as a licensing scheme for anyone wanting to list units on booking platforms such as Airbnb, it was announced today.

Speaking at a joint press conference, First Minister Mark Drakeford [Labour] and Plaid Cymru leader Adam Price outlined their intentions to empower councils to set their own limits on the number of homes being rented out to tourists or used as second homes.

Under new regulations which could come into effect as soon as the end of this summer, properties in Wales would be classed in any of three categories: primary home; second home; or short-term holiday accommodation. Any property owner or host wanting to switch from one category to anther would be required to gain specific planning permission.

Despite acknowledging the benefits that holiday lets bring to the Welsh economy, including “vital” tourism, Drakeford and Price cited an “exponential growth” in the number of holiday property listings and second homes and stated their belief that a licensing scheme would “level the field” for all types of tourist accommodation providers.

At the beginning of 2022, it was reported that there were 23,974 registered second homes in Wales.

It had already been announced that local authorities in Wales will be afforded the power to increase council tax on second homes by 300 per cent from 2023, and an increased Land Transaction Tax [LTT] may also be applied on second homes and holiday let purchases, should plans be approved.

Sam Rowlands, the Welsh Conservative spokesman for local government, told the BBC: “I welcome increased responsibilities and opportunities for local authorities to support their communities, but I do worry this is just a top-down diktat from Labour and Plaid Cymru in Cardiff Bay. Many councils, particularly those in north Wales and rural areas, have been underfunded for many years by the Labour government and struggle to fulfil their essential obligations.”

The potential clampdown on second homes and holiday lets in Wales was suggested last July when issues such as the affordability and availability of housing, and a “fairer contribution” to national and regional taxation schemes by second homeowners were cited as key reasons for the potential introduction of a licensing scheme.

Wales became the first country in the UK to give local authorities the power to charge a 100 per cent council tax increase on second homes in 2020.

The announcement follows last week’s news that second homeowners in the UK were facing potential restrictions on renting out their properties as holiday lets to tourists, as part of plans being drawn up by the Secretary of State for Levelling Up, Housing and Communities, Michael Gove.

Under proposals being drawn up to the Levelling Up and Regeneration Bill, regional managers would be afforded the power to restrict second homeowners from renting out their second property for fewer than 90 days. Any landlords seeking to use the properties as short-term rentals would be required to apply for planning permission for a change of use for the property/ies.

As second homeowners face the threat of letting curbs, the government is granting more powers to local authorities as part of its devolution programme.

In a busy week, the UK Government also announced the launch of an official review of the short-term rental market in England and the impact of holiday lets on local communities.