Holiday and Second Homes Regulation: Cornwall and Isles of Scilly

Have the new Government carried out any kind of impact assessment on the change in council tax arrangements for second homes? Have they considered whether it would have a counterproductive impact, if it was not married with a suite of other regulatory changes? People might switch from council tax to business rates and use the small business rate system, for example, and pay nothing at all. They may take other options rather than paying council tax.

Let me turn to the proposed planning use class change, which the Liberal Democrats have long argued should apply to all non-permanent occupancy residences. In other words, second homes and holiday lets should all be within one category, because we believe that the impact is the same on local communities, and therefore the change should apply not only to holiday lets but to second homes.

I hope that the new C5 use class for short-term rentals, which was announced by the previous Government, will be looked at with care, particularly the fact that it appears to fall under permitted development rights. In other words, local authorities specifically have to apply an article 4 direction to avoid a situation where someone converting a property to a holiday let simply announces it to the local authority and does not need to seek permission. I hope that the Minister will look at that issue. In the Liberal Democrats’ view, we also need to look at a sunset clause on those permissions; otherwise, there will be a perverse incentive for all of us to seek planning permission for that use class change in order to get a market advantage or an inflated price within the market. There should be a sunset clause, relating to the end of that usage, ownership or change within the Land Registry.

In conclusion, I will simply say that this is a very important issue in areas such as Cornwall and the Isles of Scilly, and—as we can see from today’s debate—in many other parts of the country. A suite of policies and changes need to be addressed by the Government, and many of us across all parties would be keen to work with them to ensure that the balance is absolutely right, and that local housing need is given the highest priority of all.

This issue bumps up against a housing crisis with years of low house building, and rising interest rates that have made home ownership unattainable for many people. It is a core mission of this Government to address that challenge. The issue is more acute in places such as Cornwall and the Isles of Scilly and other coastal, rural and urban communities, where it is exacerbated by the proliferation of second homes and short-term lets. Cornwall and the Isles of Scilly are undoubtedly some of the most beautiful areas not just in the country but in the world, and are therefore popular choices for tourists. However, that has real consequences for local residents—whether it is high prices relative to earnings, people being pushed out of the choice of home ownership or having to leave their community, a stretched private rented sector with significant pressure on local economies, families and communities, or steadily growing housing waiting lists.

The hon. Member for Chelmsford (Marie Goldman) talked about the self-defeating cycle. During the passage of the Levelling-up and Regeneration Act 2023, her colleague, the hon. Member for Westmorland and Lonsdale (Tim Farron), spoke thoughtfully and passionately about the challenge of people going to a beautiful community for a week or weekend, and then going to the pub and not being able to get food because the chef has nowhere to live. These things will eventually impact the quality of the offering and therefore perhaps its attractiveness.