Punishing Wales’ vital rural tourism businesses will not solve the affordable housing crisis

The deadline passes today for responses to the Welsh Government’s consultation on its proposals to change the criteria, which determine that self-catering accommodation is liable for business rates. CLA Cymru responds.
Tourism: walking, rambling
Walking-boots on the doorstep of a farm-based holiday let in mid-Wales

The consultation is the Draft Non-Domestic Rating (Definition of Domestic Property) (Wales) Order 2022.

“There’s no evidence that increasing the number of let days for holiday properties will address the shortage of affordable homes in rural Wales. In fact the proposals are poorly targeted and will damage a vital part of the economy,” says Emily Church from CLA Cymru.

“We support the Welsh Government’s commitment to deliver more housing that is affordable. This problem should be solved by improving the planning system to enable more rural developments to be created, and suitable buildings converted for residential accommodation. These solutions can play an important part in regenerating our countryside communities.”

“Many rural holiday lets are vital parts of farm businesses. Increasing farm diversification has been a key principle of Welsh Government policy to create strength and resilience in agriculture. Many farming families rely on this additional income stream to make ends meet. In many cases, spouses and members of the wider farming family manage holiday lets as an important income stream. This vital role – as part of integrated farm businesses – is recognised by the Welsh Government’s own research paper, “Diversification and Resilience of Welsh Farming.”

“In this document the Welsh Government itself reported that diversification revenues might need to increase up to ten-fold to replace other lost revenues. At this time of intense uncertainty in Welsh agriculture, the Government mustn’t do anything to destabilise the sector.”

Emily continues, “The increase of criteria days for a holiday let to be occupied to 182 days may mean that - following further new proposals which could punish the holiday letting sector - those businesses unable to let for that number of days could face a hike in council tax of up to 300 per cent. This may mean that they may cease to operate. The location and nature of many of these holiday lets may mean that they are unsuitable for conversion into year-round occupied family homes. In these circumstances the policy will cause much pain for very little gain.”

“Tourism is a vital part of Wales’ countryside economy. The Welsh Government itself has invested heavily in what has been the country’s fastest-growing economic sector, worth £8.9 billion - some 13.3 per cent of total economic activity. Tourism now accounts for nearly twice the economic benefit measured in Gross Value Added (GVA) of farming, forestry and fishing combined. However, in rural Wales tourism and agriculture are often intertwined. We call on the Welsh Government fully to understand the potential impact of their proposals and identify better ways to tackle the affordable housing crisis.”