Former Labour minister joins call for Welsh Government to act on ‘housing emergency’
A former Labour minister has joined the call for the for the Welsh Government to tackle the “housing emergency”.
Alun Davies, the Labour Member of the Senedd for Blaenau Gwent, was responding to the news that house prices have rocketed by 14 per cent in Gwynedd in just three months.
This means the price of detached homes increased from an average of £250,000 in the previous quarter to £280,000.
The startling figures were released from Principality Building Society’s Wales House Price Index for Q3 2020 for July to September. These figures include one home that was sold for a whopping £1.2m.
Mr Davies believes that the “unregulated power of the market” is being allowed to destroy communities.
He was echoing the calls of the Plaid Cymru candidate for the Senedd in Dwyfor Meirionydd, Mabon ap Gwynfor, who described the figures as “scary”, because the market “is out of the reach of local people”.
Mr ap Gwynfor has called on the Welsh Government to bring in regulations so that people have to apply for permission to change a property to a holiday home, to reduce the number of holiday homes and short term lets in any given community to a sustainable figure of around 20 per cent, and to look at significantly increasing the tax on buying holiday homes.
Mr Davies said: “I agree with Mabon ap Gwynfor on this. We cannot walk away whilst the unregulated power of the market destroys lives and communities.”
The Welsh Government has previously said it recognised the challenges around second homes and was monitoring the law closely.
Mr ap Gwynfor said: “It’s scary isn’t it – that’s the average price for Gwynedd, but we know within Gwynedd that there are areas like Abersoch, Aberdyfi, Criccieth, seaside areas, where the average price is even higher.
“When you consider that in Dwyfor Meirionnydd the average income is £21,000 for a fulltime job, no one local is going to be able to afford that kind of price for a house.
“The market as it is, is out of the reach of local people, which forces local people to very often work more than one job, or to move out of the area.
“Therefore the fact that the Welsh Government is refusing to do anything about this, is refusing to acknowledge that it is an emergency, and is refusing to act, forces people into poverty, or forces people to move out of the area, very often against their will.
“We need to wait to see the latest from the Land Transaction Tax, from the Welsh Government’s sale statistics to see what the nature of these sales are. But certainly the last one to be released, I think back in September, showed that for example in Dwyfor Meirionnydd, that 45 per cent of the houses sold there were second homes, summer homes, or were buy to let houses.
“Therefore, obviously we know where the challenge. The government needs to look at increasing the tax on buying holiday homes significantly higher than it is at the moment.
“They need to bring in new planning rules to make it so that people need permission to buy a and change it to a holiday home.
“We need to reduce the number of houses that are short term lets and holiday homes in any one community to a sustainable number. It’s Switzerland it’s 20 per cent. I would say that’s pretty close to what we should have.”
House prices have reach record levels in six Welsh local authorities according to the report. The surge in property sales following the end of the first lockdown in June has pushed the average house price up 3 per cent annually in Wales to £196,165.
The five other local authorities where average house prices reached record levels are Bridgend (£190,948), Cardiff (£247,030), Carmarthenshire (£172,708), Newport (£213,660) and Powys (£222,992).
With the exception of Cardiff, these areas are all included in the top 11 local authorities in Wales with the highest proportion of detached or semi-detached homes, which would indicate they are likely to appeal to buyers looking for more spacious homes suited to lockdown living.
The Welsh Government said: “We recognise the challenges second and empty homes can present to the supply of affordable housing in some communities in Wales.
“We’re on target to deliver 20,000 new affordable homes this Senedd term, and Wales remains the only UK nation to have given local authorities powers to charge higher levels of council tax on both long-term empty and second homes.
“Our land transaction tax also includes an additional 3% charge for second home and buy to let purchases in Wales, and we recently changed our eligibility criteria for business support for self-catering properties.”
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