Developments in Holiday Let and Second Home Policy Across Wales

Rural businesses across Wales may be set to benefit from a more flexible and pragmatic approach to holiday let and second home regulation, following recent developments from Cyngor Gwynedd and Powys County Council.

Recent activity suggests a notable shift in how local authorities are responding to the Welsh Government’s policy framework, with increasing recognition of the need to balance housing pressures with the economic importance of tourism.

Gwynedd signals a change in approach

Cyngor Gwynedd—previously at the forefront of introducing stricter controls on second homes and holiday lets—has now called on the Welsh Government to introduce greater flexibility into national regulations. The council has raised concerns that the current rules risk undermining rural tourism and the wider local economy.

This represents a significant change in direction. Gwynedd had led on measures such as planning restrictions and higher second home premiums, including the introduction of an Article 4 Direction. However, this has now been overturned, restoring greater freedom for property owners and tourism operators.

The council has emphasised that tourism remains a cornerstone of the local economy, supporting employment, supply chains, and community sustainability. While reaffirming its commitment to addressing housing challenges, Cyngor Gwynedd is now advocating for a more balanced approach that also protects rural economic activity.

Powys considers financial relief measures

In mid-Wales, Powys County Council is actively exploring options to ease the financial burden associated with second home premiums. One proposal under consideration is a potential exemption that would waive the first year of backdated council tax premiums for holiday let owners.

This follows Welsh Government guidance encouraging local authorities to introduce a statutory exemption, allowing self-catering properties that fall short of letting thresholds to pay standard council tax—without a premium—for their first year.

Such a measure could provide important short-term relief for rural businesses, particularly those operating holiday lets or mixed-use properties, helping to stabilise cash flow and support ongoing investment.

Pembrokeshire highlights ongoing challenges

The CLA Cymru team has also been in contact with Pembrokeshire County Council, which has raised concerns around the practicality of current letting thresholds and the timeframes involved in receiving decisions from the Valuation Office Agency.

From April 2026, Pembrokeshire has confirmed a further adjustment, reducing its second home premium to 125% for properties that do not meet the required letting thresholds. This reflects continued concern around the viability of some holiday let businesses under the current system.

These developments come against the backdrop of wider national policy changes. While the overarching framework set by the Welsh Government remains in place, local authorities are increasingly signalling the need for flexibility in how these rules are applied.

For rural Wales—where tourism is a vital part of the economy—this evolving approach may help safeguard businesses, jobs, and communities, while still addressing legitimate housing concerns.

CLA Cymru continues to urge all Welsh local authorities to work with the Welsh Government to demonstrate that the current business‑rates threshold is unrealistic for most business owners and is already having a detrimental effect on the rural economy. Where appropriate, members are encouraged to contact the CLA Cymru Tourism Lead, Emily Church, to discuss their individual circumstances.