The UK government is examining proposals to equip local authorities in England with enhanced capabilities to address the proliferation of short-term rental properties and second homes. This consideration follows growing concerns that the increasing popularity of holiday lets is significantly impacting the availability and affordability of long-term housing for permanent residents, particularly in popular tourist regions.
Housing Minister Matthew Pennycook confirmed that ministers acknowledge the pressures created by high concentrations of short-term lets and second homes on local housing markets. Speaking in response to a Parliamentary question concerning housing availability in coastal and rural communities, Mr Pennycook stated, "We are considering what additional powers we might give local authorities to enable them to respond to the pressures created by short-term lets and second homes." This signals a potential shift in policy aimed at rebalancing the housing market.
Latest figures from the Office for National Statistics (ONS) underscore the continued expansion of the short-term let sector across England and Wales. While this growth is recognised as a boost to tourism and local economies, industry bodies like Propertymark are highlighting the potential negative consequences for the private rented sector. Nathan Emerson, CEO at Propertymark, commented that the diversion of properties from long-term rental use can reduce housing availability and exacerbate affordability issues, especially in areas with high demand.
Currently, local authorities possess some tools to manage this issue, including the ability to levy a council tax premium of up to 100% on second homes. Furthermore, the government is advancing plans for a mandatory registration scheme for operators of short-term lets, and a visitor levy in England is also in development, which would allow strategic authorities to generate additional funds from overnight stays. However, these new discussions suggest that existing measures may not be sufficient to address the scale of the challenge.
The potential for new powers for councils indicates a governmental effort to strike a balance between supporting the economic benefits derived from tourism and ensuring that local communities retain access to adequate and affordable housing. Propertymark advocates for greater parity between the short-term lets sector and the private rented sector, arguing that communities should benefit from tourism without compromising local residents' access to homes.
Any additional powers granted to councils could include measures such as stricter planning controls on changes of use for residential properties or new licensing requirements tailored to local housing needs. These reforms would aim to empower local decision-makers to implement policies that better reflect the specific housing challenges faced by their communities.
Source: Office for National Statistics, Propertymark