As part of the Labour and Plaid Co-operation agreement announced in November 2021, Welsh Government recently unveiled a raft of measures to combat the impact of second homes, which is said to be contributing to spiralling house price rises and placing home ownership out of the reach of many in Wales.
Some of the measures – which include a 300% council tax premium on second homes and an increase in business tax rates for property lets from 70 to 182 days per year – are now set to come into force from 1st April 2023 and councils across Wales will have the option to enforce them.
Other proposals on the horizon may consist of changes to planning regulations so that home owners must apply for permission to change the use of residential properties to holiday lets, and quotas on second homes.
While these changes have been branded controversial and have been met with fierce criticism by Welsh Conservatives and some Westminster MPs, the data across Wales suggests action is urgently needed.
Earlier this year, it was reported by Pembrokeshire County Council that over 5,000 single persons, couples and families with varying degrees of need were on the Housing Register, while 4,072 second homes in the county were reportedly subject to council tax premiums during 2021/22.
And, while house prices and the number of second homes have risen sharply over the last few years, the number of homes listed for rent in Wales has halved from 7,237 to 3,143 with the average rent price rising by 17% between March 2020 and August 2021.
As well as the effect on young people and families struggling to find a property to rent or purchase, the effect on communities can be devastating.
It was reported last year that around 39% of housing stock in some areas of Gwynedd were second homes, whereas Cwm Yr Eglwys in Pembrokeshire drew attention for having only one permanent local resident. Such situations have devastating outcomes for schools, local businesses and the language.
While yes, we undoubtedly need more new homes, these are not permanent solutions by themselves.
While this issue is not unique to Wales, many countries have introduced restrictions on second-home ownership. In 2019, Amsterdam proposed to ban the purchase of new builds for rentals, Switzerland has imposed a 20% restriction on second homes in each commune, and some areas of British Columbia, Canada, impose taxes on residential “real estate” that is unoccupied for most of the year.
Furthermore, MPs in Westminster are now proposing to allow councils in England to introduce a 100% council tax surcharge on second homes there to combat the issue in areas such as the Lake District, Cornwall and Yorkshire. This surely undermines their earlier criticism of the scheme in Wales!
To conclude, while tourism is an important part of the Welsh economy, action is needed to safeguard the provision of social housing in Wales, and help young families onto the property ladder, especially if we are to create a strong, sustainable economy in Wales in line with the commitments made in the Future Generations Act.
Increased premiums will help ensure a fairer contribution to communities and enable councils to commit the additional funding to secure more affordable housing.
As we have seen, our neighbours and other countries across the world are attempting to address this issue and we should not shy away from doing the same.
This is an article written by Maria Pritchard of Yes Milford Haven and published in the Pembrokeshire Herald newspaper on 10.06.2022