Almost half of house sales in Dwyfor Meirionnydd to buyers using them as second homes, new figures show

Gareth Williams, local democracy reporter

New figures showing that almost half of the homes sold in one part of Wales were to buyers not planning to use it as their main residence “expose the dire situation in many communities,” it has been claimed.

Those looking to buy second homes or buy-to-let properties in Wales have to pay at least an extra 4% in Land Transaction Tax (LTT) on top of that payable for their band.

This higher rate is activated when a house is sold to someone already owning another property, which in addition to holiday homes can also includes those buying houses to rent them out and also someone still trying to sell their original home.

But with the Welsh Revenue Authority releasing the latest LTT statistics, it has now been revealed that 44% of all homes sold in Dwyfor Meirionnydd during 2020/21 were subject to this higher rate.

Described by the local Senedd Member as “devastating,” the news comes among growing concern over the viability of many Welsh speaking communities in rural and coastal Wales.

On a county by county basis, Gwynedd, Anglesey, Pembrokeshire, Conwy, Blaenau Gwent, Swansea, Rhondda and Ceredigion all saw an above average percentage of local property sales being subject to the highest rate.

In December this highest rate was raised from 3% to 4% on properties up to the value of £180,000, with the LTT being the Welsh version of Stamp Duty.

But the percentage payable in tax rises to as much as 16% for property sales of £1.6m or more.

In Gwynedd, where 1,920 residential property transactions were recorded during the year, 720 resulted in the buyers paying the higher tax rate (37.5%).

Broken down further, 590 of these were as individual purchases for someone not planning to use it as a main residence (30.7% of all property sales), as opposed to still trying to sell their previous home or being bought by a company.

Anglesey saw the second highest figure with 410 of the 1,210 property transactions paying the highest rate (33.88%).

Of those, 320 were for properties not designed to be used as the buyer’s main residence (26.4%).

‘Suffering’

Speaking to the Local Democracy Reporting Service, the local MS was adamant that the “vast majority” of the 44% of homes sold under the highest tax rate in Dwyfor Meirionnydd were bought as second homes.

Ahead of a rally set to be held within his constituency on Saturday (July 10), Mabon ap Gwynfor MS said: “These latest statistics show that the housing crisis is getting worse and that the Welsh Government’s decision to raise the LTT by 1% hasn’t worked.

“We have to take much more ambitious steps, in Dwyfor Meirionnydd 44% of sales were subject to this highest rate, which means second homes almost without exception.

“With high figures also in areas like Pembrokeshire and Anglesey it shows that these are the areas suffering the most from this crisis, councils like Gwynedd have increased the premium but it doesn’t seem to be making an impact.

“There is a widening gap of the rich being able to increase their property portfolios while others are being locked out of the housing market.”

With a protest to take place at the site of the Tryweryn Dam on Saturday, organised by Cymdeithas yr Iaith, Mr ap Gwynfor added: “These figures just strengthen the argument for immediate action, people are seeing their communities changing before their very eyes.

“The Government hasn’t yet taken the necessary steps so this protest is a sign of people’s frustration, there are measures they could take immediately, such as raising the LTT and closing the tax loophole.

“The future of Welsh as a community language is at risk. these areas are the cradles of the language and we can’t afford to see further depopulation and Welsh losing further ground.

“But that’s what’s happening, local people in areas where there’s a higher concentration of Welsh speakers are being forced out which weakens Cymraeg.

“Any idea the government has of realising a million Welsh speakers is merely a pipedream unless they grasp this situation with urgency.”

‘Stark’

Earlier this week the Welsh Government unveiled a “summer of action” as it plans to tackle long-running concerns over the impact of second homes.

Among these measures are a planned statutory registration scheme for all holiday accommodation, including short-term lets, and potentially a separate planning classification for second homes.

The Welsh Government is also expected to carry out a consultation on shutting what is often referred to as a “loophole,” which allows the owners of second properties to flip from domestic to non-domestic rates, but making use of Small Businesses Rates Relief to avoid making any contribution at all into local authority coffers.

Housing minister Julie James, setting out the Government’s proposals on Monday, said that all second home owners should be making a “fair contribution to the communities in which they buy property” and suggested more stringent checks and potential changes to local taxes.

But others have criticised the Government for moving too slowly, described by Plaid Cymru politicians as “kicking the issue into the long grass” after pilot areas and consultations were mooted.

Arfon MS Sian Gwenllian described the latest figures as “stark,” while calling for a tripling of Land Transaction Tax fee on the purchase of second property.

“I was approached this week by a constituent in Llanberis who told me that the situation in the post-industrial village is heartbreaking, and makes her want to move away,” she added.

“In a single year, five houses on her street have been bought as second homes or summer homes.

“She said that such houses, empty for most of the year, changes the social fabric of the village.”

‘Urgency’

The leader of Gwynedd Council, Cllr Dyfrig Siencyn, responded to the latest statistics with: “These stark figures only confirm the high proportion of properties purchased as second homes in Gwynedd, contributing to an already inflated housing market.

“It exposes the dire situation of our communities when they are unable to purchase homes within their localities.

“We call on Welsh Government to act as a matter of urgency and avoid further procrastination.

“We have already provided them with short and longer term actions which they can implement, and we are keen to work with the Government to achieve speedy solutions.”