Welsh Government opens holiday let consultation period

Wales: The Welsh Government has opened a three-month consultation period with a view to implementing a statutory licensing scheme for short-term holiday let hosts and landlords in Wales.

The proposed licensing scheme would require hosts and / or landlords to obtain a licence if they want to operate properties as holiday lets, as well as prove that they have the necessary insurance, a fire risk assessment, gas safety certificate, proof of electrical safety, and permission to rent out the premises.

Made up of a majority Labour administration and the backing of Welsh nationalist party Plaid Cymru, the government aims to address the “negative impact” that short-term lets can have on housing availability and introduce stricter safeguards for local communities. It believes that any such licensing scheme would create a “level playing field” for all tourist accommodation businesses across Wales, enhance compliance, and help authorities to better “understand the scale and nature of the sector”.

In July, 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, as part of a ‘Co-operative Agreement’ between the two parties.

Under the proposed regulations in Wales, properties 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.

Local authorities in Wales would also 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 the plans be approved.

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

Designated Member Siân Gwenllian said: “Through our Co-operation Agreement, we are taking radical and immediate action to address housing market failures and the lack of affordable housing, using the planning, property and taxation systems to make a difference. This proposed licensing scheme is part of our approach, making it a requirement to obtain a licence to operate visitor accommodation, including short-term holiday lets.

“There has been a huge increase in the short-term holiday let sector in recent years which is exacerbating the housing crisis in Wales. While we have a regulatory framework in place in Wales for private rental accommodation, there isn’t one that covers all types of visitor accommodation.

“Our proposals will bring greater safeguards to local communities on the use of residential dwellings as short-term holiday lets in particular, whilst enhancing the visitor experience and visitor safety in Wales,” she added.

Economic Minister Vaughan Gething said: “The visitor economy is changing rapidly, and the role of visitor accommodation presents major challenges for communities across the world. For example, the growth of online booking platforms has brought many benefits, such as new routes to market and increased consumer choice.

“However, we are aware of the concerns around compliance with existing requirements and the impact of short-term lets on housing stock and our communities.

“Our plans to develop statutory licensing scheme will be focused on levelling the playing field as part of a long-term response to the major challenges we face.

“Over the course of the past year, we have been exploring and engaging with stakeholders on how such a scheme could work in Wales. As the consultation now opens, we would like to hear further views and would encourage the sector to respond to the consultation,” added Gething.

Landlords will have until Friday 17 March 2023 to submit their responses to the consultation.

Elsewhere, UK Prime Minister Rishi Sunak has pledged his commitment to implementing a registration scheme in England, a priority drafting of a registration scheme has been approved in Ireland, and a six-month delay to a short-term let licensing scheme has been announced by the Scottish Government.

Furthermore in 2023, the 27 member states of the European Parliament will discuss and vote on an OTA data-sharing proposal put forward by the European Commission which is designed to “enhance transparency” and “help public authorities ensure the balanced development” of a sustainable tourism and short-term rental sector.