Earlier this week, the British government announced new controls on holiday lets; the government plans to introduce a mandatory national registration scheme for any property being rented out for more than 90 days per year. The regulations will not apply to people renting out their main home for less than 90 nights. The Department for Levelling Up, Housing and Communities plans to provide discretionary powers to local authorities to require planning permission for properties to be turned into short-term lets, existing short-term let properties would automatically be reclassified.
It is rare for tourism issues to make the mainstream press, but overtourism and holiday lets often do.
Back in June 2022, the BBC reported that the number of holiday-let homes had increased by 40% between 2018 and 2021. The BBC report revealed that there had been a surge in holiday lets during the pandemic and that this increased property prices and pushed local people out of their communities. 152 councils responded to the BBC’s survey on properties available for at least 140 days per year and registered for business rates rather than council tax. Government figures and the BBC survey both reported 40%. However, it is likely to be more than that in some areas where the homes are not registered for business rates.
Research published by the BBC in September 2021 suggests that this trend was accelerated as more British residents sought to holiday in the UK. Almost 4,000 homes have been flipped in South West England from the start of the pandemic, amid record visitor numbers in Cornwall and Devon. There was a 27% rise in the South East. Holiday homes provided additional income for owners and grant income during the pandemic.
For the communities affected, and they are not all in the South, family life and schooling are disrupted when they are forced to move regularly, and each time they move, the rent rises as a proportion of family income.
Some 96% of holiday homes in England are covered by the small business rate regime, paying little or no property tax. There were consequently incentives to enter the holiday-let market. Robert Hayton, UK president of Altus Group, said: “The grants for second homeowners will have been far more lucrative than ‘business as usual’ for many, especially in the off-seasons, whilst there is a pivot towards holiday lets as rental prices boom in hotspots.”
The data journalist Florian Zandt, has robust data showing how much more important hotel accommodation is the vacation rentals. Vacation rentals revenue ranges from 15.5% to 6.5% – a relatively small part of the tourism industry has a big impact on communities. Back in November data journalist Shanhong Liu reported that 64% of surveyed hotels reported good to very good development of average daily rate (ADR), compared to 49% of Short Term Rentals.
Obviously, for those earning from holiday lets, they are good things. But as communities lose homes, schools, surgeries and libraries close, shops serve tourists rather than locals, and tourism businesses find it harder and more expensive to recruit staff. Communities are hollowed out as young people and families move away.
