It’s not illegal to own a second home in Wales. However holiday cottage or apartment owners now feel one of the sharp ends of what the Welsh Government calls its “three pronged approach” to tackling the housing crisis. Last year Wales became the first UK nation to give local authorities the power to charge a 100 per cent increase in second homes. In the past months, second homeowners might have become less comfortable again, as the issue seems to have crossed the ideological threshold where emotions hold great sway. News media have negatively portrayed non-local holiday homeowners, and arguments have appeared about cultural displacement of the local Welsh community. To many, the Co-operation Agreement made in November between the Welsh Labour Government and Plaid Cymru, means that Welsh culture and language are likely to play an increasingly prominent role in Welsh politics. Already, since the Agreement was made in November, the Programme for Government has been amended to include reference to “capping” the number of second homes; bring more homes into “common ownership” and also licence holiday lets.
As things stand, the issue has come to a head as the Welsh Government is consulting on Planning Legislation and Policy for Second Homes and Short term Holiday Lets. Open to responses until late February, the Government proposes to create distinct classes of primary homes, secondary homes and holiday lets - and to treat them distinctly in planning. Inevitably, it’s raised questions about definitions, speculation about intent, and concerns about impact. And there’s a host of reasons why people may have more than one dwelling-place: just ask a North Wales Member of the Senedd for example, or anyone whose personal and family relationships don’t conform to that old term “nuclear.”
It’s all about availability of affordable housing. The issue’s not unique here, of course, so government elsewhere will be interested in what Wales does. The pandemic has exacerbated the problem: more demand for staycations, and more house-demand from formerly office-based workers who now expect to work from home.
The Welsh Government’s delivered the highest annual level of social homes since records began in 2008. About 19,000 new homes were built in the 2019-20 year. In fact, having spent more than £2 billion in the last Senedd term, targets here are being met. Tackling the “filling the leaky barrel problem,” various initiatives now exist to build affordable homes and keep them that way.
But what about the second home issue? However sharp the prong may be, will it actually help the housing issue? Might it detrimentally affect an economy increasingly dependent on tourism - thanks, in part, to Welsh Government policy - including the pressure exerted on farms to diversify? Earlier this year, CLA Cymru called on the Welsh Government not to make rural businesses unintended victims of legislation intended to tackle unrelated issues, here.
Research undertaken by the Welsh Government itself reveals the true nature of the issue. Offered as evidence to support the consultation process, we learn that there are 24,423 second homes here (not including units, which incur business rates). We read that just under 5,000 of them are in Gwynedd, just under a thousand fewer in Pembrokeshire. It’s interesting to see that in the two cities of Cardiff and Swansea there are reported to be 4,000 and 3,000 respectively. It’s fewer than expected, though significant: predictably if you throw a spotlight on Dwyfor and Beddgelert (for example), it tells us that 40 and 23 per cent, respectively, of the local housing stock is second homes. Where the problem exists, it is severe.
More problems muddy the waters. Many holiday homes may be unsuitable, for one reason or another, to be a permanent dwelling. Back in Wales, many second homes’ origins lay as elderly relatives’ accommodation attached to a family property. Today these properties are likely to be part of a business and where there’s a business there’s a revenue, which is benefiting the economy not just through the letting transaction, but secondary spend: “the tourist pound.” Even in the context of the housing crisis, it’s not to be sniffed at and must be presented to the consultation as evidence.
And what about the influence of the unregulated online accommodation-booking sites? Effectively a “pop-up shop” for tourism, this concept has thrown a curve ball into the holiday-let market. For that matter, where do static caravans fit? These can be large and salubrious. They’re clearly not well-suited to be permanent dwellings, but as second homes or holiday lets, should they evade regulations targeting bricks and mortar?
Finally, let’s understand that property has been a target for investment while pensions have performed poorly over the past twenty years or so. At retirement, these second homeowners had the option of moving into their investment or realising the asset as a retirement income. This might be restrained alongside an improvement in pensions’ options and outlook.
The Government must hear that there are other ways of increasing the housing stock without the risk of nibbling away at valuable parts of the economy
We’ve long supported members’ views that the planning regime needs to be a positive enabler of change. In the rural context, there is land and there are suitable buildings which can be developed for residential use. The Government can’t afford the moratorium on development owing to high phosphates levels in river catchments to go on forever. Equally, our Climate Change Minister, Julie James MS, told us that the Minimum Energy Efficiency Standards (MEES) regulations from Westminster are not fit for purpose. Here we know that many traditionally built (and desirable) rural dwellings are effectively been removed from the letting market. This is one hole in the “leaky bucket” which can be plugged.
We will be responding to the consultation process in February – and I welcome your experiences and views before the end of January. The fact is, while we have our concerns about parts of the “three-pronged approach” and the unintended consequences for farms and rural businesses, we do feel that the housing crisis must be addressed. Many of us are sceptical that higher council tax rates will reduce the number of second homes – as one member told me, “If you can afford a £750,000 holiday home, you can afford to pay double council tax.” Fair enough, may be, if the money raised is spent on more housing.
Finally, one young farm manager, interviewed for a recent Land & Business magazine feature, told me how difficult he’s finding it to find an affordable place to live. This wasn’t in a major tourist area: this is a farm on the outskirts of Bridgend. He’s one of our next generation of CLA members. Tellingly, one member led a consensus in a well-attended recent branch meeting when he said the words, “It is immoral and impractical that good homes are empty through long parts of the year.”
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