‘Three pronged attack’ on Welsh Government’s ‘lack of appetite’ to tackle housing crisis

Gareth Williams, local democracy reporter

Gwynedd Council is planning a “three pronged attack” on the Welsh Government’s “lack of appetite” in helping tackle the housing crisis facing parts of rural west Wales.

A new council commissioned research paper has recommended measures that would require changes to national planning and taxation legislation, but have been described as long overdue due to spiralling house prices in many areas of Gwynedd.

Finding that almost 60% of local people are currently priced out of the housing market – with 6,849 or 10.77% of the country’s entire housing stock now being designated as second homes – among the earmarked measures to tackle the issue are a licensing system for short-term holiday accommodation such as AirBnBs.

This was after noting that growing number of such properties in the county is having “a severe detrimental effect on the ability of local people to access the housing market”.

Recommending the introduction of a modest levy to mitigate “excessive tourism” – which would follow similar proposals in Edinburgh to introduce a £2 a night “tourist tax” charge – it also reiterates longstanding calls to close the “loophole” which currently allows many second home owners to avoid paying any council tax at all if let out for enough days in a calendar year.

A full council meeting last week voted to explore increasing the council tax premium for second homes from the current 50% rate to as much as 100%,  despite concerns it could persuade even more of their owners to “flip” towards paying non-domestic rates, as has already been happening in the county.

Such action can be actioned if it can be proved that the unit is available for up to 140 days in a year and actually let for at least 70.

But with most self-catering holiday accommodation being eligible for Small Businesses Rates Relief, it often results in their owners making no contribution at all to local taxes into local authority coffers.

 

‘Excuses’

Addressing Thursday’s meeting of Gwynedd’s Communities Scrutiny Committee, senior property manager Dafydd Gibbard said that the research paper contained evidence highlighting the scale of the problem facing the county and would strengthen the council’s hand in heaping pressure on Cardiff Bay ministers.

“What we often hear during discussions with ministers and even other councils are excuses that this is not possible or there’s no evidence,” he said.

“But I believe we’re killing these excuses with a three pronged attack, we have the Chief Executive working on the second home premium and sorting that issue out, a housing strategy going to cabinet next week and now this piece of work which provides evidence and a clear path forward.

“Together all of these will make that fight easier.”

Cllr Gareth Griffith,  the cabinet member for the environment, added: “I was disappointed that other local authorities chose not to contribute to this piece of work, there are others who are facing similar problems to ours.

“Since this was made public, however, we have been made aware of more interest.

“I think we’ve showed the way and can assure everyone that this report won’t stay on the shelf.

“There’s a fight ahead of us, I read in the press recently that Mark Drakeford met a group from Nefyn but I can see there’s no appetite by the Welsh Government at present and the reaction they got in Nefyn is that nothing will happen until after May’s election.

“There are aspects that can be achieved relatively quickly, such as the finance bill, and while others may take more time I think we all want the same thing but how we get there we may not agree.”

‘Step forward’

With Cllr Griffith noting that “there was only so much” that authorities like Gwynedd could achieve without national legislation, the study found that on-line platforms such as Airbnb, HomeAway and Bookings.com were making it far easier to market residential units for holiday use.

One AirDNA survey had shown an increase of 915% in available units in Gwynedd in the summer of 2019 as compared to January 2017.

Urging similar action in Wales, Cllr Griffith pointed to a soon-to-be implemented system in Scotland that will require all holiday units to obtain a licence before they start letting, as well as needing planning permission in some areas.

He suggested that a similar system in Wales would be a “significant step forward” and urged ministers in Cardiff to take such steps.

In full the the draft research paper calls for:

• Amending planning laws to include an additional use class for short-term holiday accommodation, allowing councils to identify ‘control areas’ where planning permission would be required to change an ordinary property to short-term holiday let accommodation.
• A mandatory licensing scheme for short-term holiday accommodation which would be the responsibility of the local councils to implement.
• Changing the Local Government Finance Act so that any property that is not the owner’s main or sole residence (whether a second home or used as short-term holiday accommodation) continues to pay domestic rates and any council tax premium in place.

A Welsh Government spokesman said they recognised the challenges second homes present to the affordability and availability of housing in some communities in Wales.

Speaking in the Senedd over the summer, Welsh Language Minister Eluned Morgan conceded it was a “really complex issue” but that the Government was determined to make it possible for people who are brought up in an area to be able to stay there.

She added that Wales was the only UK nation where local authorities can charge up to a 100% premium on the standard rate of council tax on second homes.

The council’s cabinet is set to discuss the recommendations on Tuesday and if approved, to later submit the adopted research paper to the Welsh Government.