Cost of renting in Wales soaring due to proliferation of holiday lets, say campaigners

The cost of renting a property in Wales has soared because of the proliferation of holiday lets, according to a campaign group.

Baroness Alicia Kennedy, director of the Generation Rent campaign, said that it costs around one quarter more to rent a home in regions popular with holidaymakers than it did two years ago.

Wales was hardest hit in the UK with the number of properties available to let down by as much as 53% in two years, with rents increasing by 26% in the same time period.

Generation Rent said that there was now “unbearable pressure on renters” in popular tourist communities. They called on Chancellor Rishi Sunak to withdraw mortgage interest relief from landlords of furnished holiday lets, as part of creating “a level playing field with the wider private rented sector.”

They also called on governments to “regulate the holiday lets market, ensure owners of holiday lets and second homes pay enough council tax, and build enough homes to allow people to stay in the areas where they grew up”.

Baroness Kennedy said: “Self-catering accommodation plays an essential role for the tourist industry, but it is too easy for landlords to evict locals from their homes to make way for more lucrative holidaymakers.

“As a result communities are being torn apart and businesses that serve tourists struggle to find staff. The situation is unsustainable.

“The government must give councils powers to tax and regulate their local holiday lets market appropriately, but should also act directly to take tax perks away from holiday lets so we keep homes available for people who need one.”

Plan

Earlier this week it was revealed that Wales has seen the biggest increase in house prices in the UK.

Rightmove said there had been a 2.3% rise in the past month alone and a 10.9% increase year-on-year. The Principality Building Society reported that the average price in Wales had now hit a new peak of £215,810.

Plaid Cymru’s housing spokesperson Mabon ap Gwynfor also reacted to the highest ever house prices in Wales, saying it was “further proof that Wales is in the middle of a housing crisis”.

“Wales has seen a 2.3% rise in house prices in the past month alone and a 10.9% increase year-on-year overall. People are being priced out of their communities at an alarming pace,” he said.

“And it’s not just rural and coastal Wales. It’s the valleys too. Median gross weekly earnings in Torfaen, for example, is just £554.58 but has seen one of the highest sale rates at 80%.”

Last month the Welsh Government unveiled its plan to tackle the homes crisis, which is blamed for driving up prices and making communities in many rural areas unaffordable.

It will include setting up a pilot area in Wales where new measures will be trialled before a wider rollout.

The Welsh Government’s three-pronged approach will focus on:

• Support addressing the affordability and availability of housing;
• The introduction of a statutory registration scheme for holiday accommodation;
• Using national and local taxation systems to ensure second home owners make a fair and effective contribution to the communities in which they buy.

Minister Julie James said at the time that the continuing rise of house prices meant that people, especially younger generations, could no longer afford to live in the communities they had grown up in.

“A high concentration of second homes or holiday lets can have a very detrimental impact on small communities, and in some areas could compromise the Welsh language being spoken at a community level,” she said.

“We have already taken strides on some of these issues – last year we became the only nation in the UK to give local authorities the power to introduce a 100% council tax levy on second homes.

“But the urgency and gravity of this situation calls for further intervention, which means real and ambitious actions are delivered at pace, to inject fairness back into the housing system.

“Taking recommendations from Dr [Simon] Brooks’ report, our new three-pronged approach will kick-start a summer of action which will determine how we tackle this issue now and into the future.

“I am calling on all political parties across the Senedd to get involved in this, as we look to empower our communities to exercise their right to live in good quality homes, wherever they are in Wales.”