Welsh thinktank the Bevan Foundation, working in partnership with Shelter Cymru, has published a new report on 7 August at the National Eisteddfod. It analyses evidence on the prevalence of second homes and holiday lets using permanent homes across Wales. And it evaluates policy measures to tackle the issue which have been put in place over recent years.
The report follows an announcement by the Welsh government that it will be reviewing the controversial 182-day rule for holiday let businesses in Wales, as well as a commitment in the Plaid Cymru manifesto to review the effectiveness of the range of current measures to tackle the impact of second homes and holiday lets on local housing markets.
In its report, Holidays or homes? The loss of homes for the people of Wales to holiday accommodation, the Bevan Foundation provides new estimates on the scale of the issue. It highlights that between 21,300 and 25,300 dwellings with could provide permanent homes in Wales are currently being used for holidays. To put this into context:
- The higher estimate of 25,300 is equal to the number of households in Merthyr Tydfil County Borough. It accounts for around 2% of the total housing stock across Wales.
- The lower estimate of 21,321 would still be enough to rehouse every household in temporary accommodation at the end of September 2025 (6,426) three times over.
Holiday homes have growing impact on Welsh housing
The Foundation’s analysis shows that while there are clear concentrations of holiday accommodation in areas which have traditionally been hotspots, growing numbers can be seen across Wales, as ‘staycations’ remain popular and tourists explore new areas.
It reveals a 10% increase in holiday lets using permanent homes over the last four years, with an additional 1,345 homes likely to have been lost to households in need of a home.
The report commends the scale of the action undertaken by the previous Welsh government. It introduced several measures working with Plaid Cymru via the Co-operation Agreement. However, the report argues that the overriding policy intention of improving the affordability and availability of homes has not always been clearly stated, nor how interventions will directly achieve it.
Taxation action in particular has had implications for the broad range of accommodation which is used for holidays, rather than focusing on the use and loss of permanent homes. This lack of focus is diluting the opportunity to address the availability and affordability of homes for local people, as well as impacting commercial holiday let businesses using types of accommodation which could not provide permanent homes.
The report argues that given the evidence of the growth of the issue across Wales, second homes and holiday lets are now a national driver of pressure on housing supply. National action is therefore needed, rather than leaving it to local authorities to tackle the problem, and that action should focus on preventing the loss of permanent homes.
Recommendations
The recommendations in the report include:
- A national requirement for planning permission for change of use from a permanent home to holiday accommodation (second home or holiday let) or a change between holiday accommodation types. This would replace the current ‘Article 4’ system whereby local authorities must introduce their own planning restrictions.
- Moving away from the current lettings day threshold system (the 182-day rule) and instead using the planning status or intended purpose of the accommodation to establish the tax system in which they should sit – businesses being charged business rates and homes coming under the Council Tax system.
- Ringfencing the funds raised through Council Tax premiums on holiday accommodation for local housing services and boosting the supply of homes which are genuinely affordable to local people, in particular social homes.
- Incentivising holiday accommodation which does not use permanent homes (such as yurts, barn conversions or shepherd huts) as part of a wider tourism strategy.
- An increase of at least 2 per cent in the higher rate of Land Transaction Tax on the purchase of homes for holiday accommodation.
- A robust and effective registration and licensing scheme for holiday lets to not only improve the management of properties, but to minimise any negative impact on the surrounding community and the availability and affordability of homes locally.
Wendy Dearden, senior policy and research officer at the Bevan Foundation, said:
It cannot be right that thousands of people in Wales are homeless and living in B&Bs or hotels while up to 25,000 homes are being used for holiday accommodation.
In our research, we heard about range of action being taken by local authorities, but we don’t think that this is enough. It’s time for the Welsh Government to take more national action through a cohesive package of taxation, planning and regulation.
Taken together, the measures we recommend would lead to a more consistent approach across Wales, while supporting targeted local action where it is needed. They would support businesses in the tourist industry while minimising the impact on local communities and ensuring that houses are used for their intended purpose – as affordable homes for local communities.
Ruth Power, CEO at Shelter Cymru, said:
Every day we see firsthand the impact of the housing emergency on people and communities across Wales, and nowhere has the long-term failure to address this been more clearly seen than in the growth of temporary accommodation across Wales.
Through our work providing advice and advocacy to people in every part of Wales, we know the impact this is having, with lives stuck on hold, sometimes for years, while people wait for a permanent home.
Shelter Cymru recognises the important role that tourism plays in the Welsh economy, but we also believe that everything starts with home. At a time where we face a housing emergency, it cannot be right for families to be ‘temporarily’ housed in hotel rooms while ever more of our homes, already in short supply, are given over to holidays.
This is why we are calling on the Welsh Government to take the steps needed to reverse this trend and to build a Wales where everyone can access a safe, secure, suitable and genuinely affordable home.
The report forms part of a series of research reports the Bevan Foundation and Shelter Cymru are producing in partnership. It examines the use of temporary accommodation in Wales and aims to move people into permanent homes by providing more social housing.
Featured image via the Canary
By The Canary
