Welsh Government gives statement on ‘unparalleled’ measures tackling second homes and affordability
Climate Change Minister Julie James has delivered a statement on the Welsh Government’s approach to tackling issues caused by second home ownership that she described as being “unparalleled in a UK context”.
Addressing the large number of second homes and short-term lets in many communities is one of the commitments outlined in the Welsh Government’s Programme for Government and the Co-operation Agreement with Plaid Cymru.
To achieve this, they say that a range of action has been taken to help manage future numbers of second homes and short-term lets.
Council tax rises
From April 2023, local authorities have had the powers to introduce higher discretionary council tax premiums on second homes and long-term empty properties – up to 300%.
From April this year, 18 will be applying premiums on one or both of these types of properties.
Several local authorities have also indicated they intend to increase the percentage charged year-on-year over a three-year period, up to the new maximum, particularly for long-term empty properties.
Support has also been put in place for struggling homeowners.
Addressing the Senedd yesterday (12 March), Climate Change Minister Julie James said: “We are acutely conscious of the challenge in finding affordable property, but also of being able to afford to remain in it.
“As part of the Co-operation Agreement, we considered gaps in the mortgage market and our current support for homeownership.
“This work will help all parts of Wales better understand the implications and processes involved in taking forward this groundbreaking work.”
Concerns
Mabon ap Gwynfor raised concerns about second homes pushing up property prices and undoing the social fabric of communities by forcing families to move.
“Many communities have been disembowelled by the numbers of second homes,” he said.
Plaid Cymru’s shadow housing minister welcomed latest statistics showing the number of second homes is expected to fall 9% from 24,000 in the 12 months from April.
He said Gwynedd Council raised £9m through council tax premiums in 2023-24, with £6m allocated to an action plan to provide homes for young people and £3m for homelessness.
The Dwyfor Meirionnydd MS called for a significant expansion in the availability of social housing, according to local need across Wales.
He described the Welsh Government’s aim of building 20,000 social homes by 2026 as far from adequate, warning that ministers will not hit the target at the current rate of progress.
“National embarrassment”
Janet Finch-Saunders, who declared an interest due to property ownership, stressed that targeting second-home owners is not a panacea.
The Conservatives’ shadow minister said: “The homelessness now seen in Wales is a national embarrassment. Affordable homes, for many, are a major problem.
“However, the targeting of short-term holiday lets and second home owners is not the panacea … because, like it or not, they do contribute towards our local economy.”
Ms Finch-Saunders called for the Welsh Government to clamp down on the long-term “scourge” of empty homes by urging councils to use compulsory purchase powers.
The Aberconwy MS raised concerns about probate, saying it often takes two years, with Ms James agreeing but accusing the UK Government of under-funding the system.
“Virtuous circle”
During the statement on March 12, Ms James stressed that if you are lucky enough to own more than one house, then you should be able to pay a bit more.
She said: “It means there is more housing stock for local people, who need to work and live locally, to work in the tourist industries that are bringing those people there in the first place.
“This is a virtuous circle and not a vicious one.”
Mike Hedges, a Labour backbencher who represents Swansea East, welcomed higher council tax premiums on second homes and long-term empty properties.
“I’ve just discovered it’s now being copied in England,” he said. “So, I think that people may well have to change what they have said up till now.”
Mr Hedges called for legislation to tackle the growth of short-term lets, such as Airbnb, warning: “That really is the big problem that is going to have to be addressed.”
Ms James said plans for a licensing and registration scheme aim to level the playing field.
Help to Stay Wales
An immediate priority was considering a gap in the market for those struggling to afford mortgage payments and at serious risk of losing their home due to the cost-of-living crisis.
In that context, the Help to Stay Wales scheme was developed and launched in November 2023, with up to £40m available over two years to help keep people and families in their homes.
Last year, the £50m Empty Homes Grant scheme was also introduced, helping bring up to 2,000 long-term empty homes back into occupation.
The Welsh Government also protected the £25m budget for 2024/25 and deferred £19m of the 2023-24 budget to 2025-26 to maximise the scheme’s impact.
The Minister also provided an update on the tailored Homebuy offer, working with Cyngor Gwynedd and Grwp Cynefin as part of the Dwyfor second homes and affordability pilot.
The HomeBuy scheme in the pilot is already proving to be a success with homeownership already becoming a reality for 13 families.
This is a significant increase on the one completion in the five years preceding the introduction of the pilot.
The pilot also actively supports community-led housing capacity and works with existing groups, as well as encouraging new ones to form.
“Taking action”
Designated Member, Sian Gwenllian, said: “Through the Co-operation Agreement we are taking action to help people live in their local communities, addressing the high numbers of second homes and short-term lets. Unaffordable housing must be addressed if everyone is to have the ability to live and work in the communities in which they grew up.
“We have introduced a range of measures that will make a real difference, from new powers on how much council tax can be levied on second homes, to changes to the planning system. We will continue to work together to tackle a problem that is evident across Wales.”
The Welsh Government has introduced ground-breaking changes to the planning framework. Last summer, Cyngor Gwynedd consulted broadly on a proposed direction which would mean that those wishing to change residential properties to either second homes or short-term lets would, in future, need planning permission to do so.
More than 4,000 responses were received and will now be analysed to develop a Consultation Report.
Cyngor Gwynedd is committed to sharing ongoing learning throughout this process.
Eryri National Park will also consult on this direction from May
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I have a full-time job in mid Wales and own a house there which I have renovated with local builders, plumbers and electricians etc and bought all materials locally. My family live in south Wales where I live at weekends. I contribute to both communities being a trustee in two local charities, I have a Welsh speaking family. Should I pay more council tax?
Yes, absolutely. You have 2 homes….others dont have any.
I agree. But, the question is, if Steve was pushed to sell his home, it’s highly unlikely that those who have no home would be able to buy it as the problem is not a lack of homes, but a lack of affordable ones. It would go on the open market, with no local occupancy clause, as our councils don’t have the backbone to implement them. The house could be sold and turned to an airbnb, or to someone who is indifferent and apathetic to Cymru a’r Gymraeg, or indeed to anti-Cymraeg colonists. So, in my view, this triple tax… Read more »
Recent data shows there are twice as many empty homes in the UK than second homes and holiday lets combined. Surely the answer is to get these properties habitable?
Absolutely Rhufawn Jones. This is exactly what I pointed out to Ceredigion CC, AM and MP recently. The dwelling will almost certainly be purchased by middle aged incomers from afar ( likely England) in order to retire. Most will not contribute, rather be a burden on our Social Services and displace very many owners of Welsh descent or were even born here – very many are Welsh speaking but there is a dearth of any realistic opportunities in Ceredigion. I know of 2 such cases in my immediate area – both first generation Welsh speaking owners and their families have… Read more »
How can. You say they will not contribute. They are British will be paying taxes in your area. They pay VAT like you. They have the resources to spend in your community. Would you rather the hose be empty with no income from it to the local area. Look at the mess the 25% who voted for devolution has got us into.. rapidly approaching Third world status. We now have three levels of government in this country. Uk government , Cardiff , local councils and the self important councillors who are there to top up their pensions , oops that’s… Read more »
Or would you rather properties were occupied all year-round and being able to assess the relative economic contribution to the community? Interesting that one of the tiers you reference, the U.K. government, is now playing catch-up with Welsh government on council tax premiums.
You are right. Most people struggle to buy a home. I had two children a wife and one income. We did not want other people to pay for our lifestyle. Private rental then saved a deposit for a house . We were like thousands of other Ordinary people. Put the blame where it should lay. Thatcher and the right to buy. Council houses were supposed to be affordable homes. Who got the money from the sale of council houses. No one could buy those houses. It is a scandal that councils put extra tax on so called second homes. I… Read more »
My wife was born in London, we want to be given a cheap property in.the Capital!!! Guess what we and 100000s don’t moan we commute 2 hours a day to our jobs in Kensington.
It’s about time Julie James read the Swansea Uni report on house prices in Wales which her government commissioned. It categorically states that Inward Migration, not second homes, is the root-cause of house price inflation. She also states second home owners should pay “a bit more”. Since when is “a bit more” £5000 per annum??? The media is full of complains because CT has risen by 13% well try funding a 226% rise! The problem.of affordability is twofold: 1. There is a serious shortage of employment opportunities that pay a salary that qualifies for a mortgage; and 2. Councils have… Read more »
Could not have put it better myself. Let’s be honest this is about raising additional income from those who don’t have a vote. Plaid Cymru seem intent on using additional monies for ‘ general purposes’. So there you have it. Their conclusion in Ceredigion is ‘ others are doing it, so we will do the same’ in case those incomers come here instead.
Hello Arthur. Remember Plaid are the follow on from terrorists. Remember arson on homes in Wales..minsgree with you
I agree, second home owners are blamed for everything that’s wrong with the housing market.
Councils failed and continuing to waste public money. They seem to be the new REMPLOY.
Ms Finch-Saunders is surely having a laugh suggesting that local authorities use their compulsory purchase powers to buy up empty properties. Maybe if Thatcher hadn’t introduced Right to Buy and the past 14 years of Tory ideological austerity hadn’t reduced local authorities’ finances to the bone that might have been an option. As it is, it seems more like a cruel joke.
Absolutely – this has had a massive impact. She knew that this was a vote winner for ‘ white van ‘ man. All political !
The first comment gave an example of living in South Cymru and working in Mid Cymru as the rationale for needing a home in both places. However the two home option is only available to those who can afford to own and run two homes. As most people find it a challenge to own and run one home the – have to buy a second home argument – does not affect many workers. In addition if you can afford it I’m sure that the calculation that owning an additional home where you work is a good investment plays a significant… Read more »
Where is this Cymru?
‘Where is this Cymru?’
As was said in Monty Python and the Holy Grail
“Oh what a give away”