Housing in Tourist Destinations

The Levelling-up and Regeneration Act 2023, which received Royal Assent at the end of the previous Session of Parliament, makes provision for local authorities to charge double council tax on second homes. People who own second homes and do not rent them out to local people should rightly pay more to make up for the fact that those properties have been removed from primary occupancy. That was the right thing to do, and the Government did it. Cornwall Council is keen to apply the provision as soon as possible because it will bring in an anticipated extra £20 million a year. The register of holiday lets is also welcome, as it will for the first time give local authorities a full and accurate picture of exactly how many properties in the communities they serve are being used as holiday lets. Knowing how many holiday lets there are is the first step towards being able to better manage their number in a community.

The Government have consulted on giving powers to local councils to require a change of planning permission when homes are taken out of residential use and converted to holiday lets. I know that measure is controversial for some of my colleagues, but for me it is simple: if planning permission was granted to build a house to be somebody’s home and the new owner wishes to change its use to a holiday let, which is essentially a business use, a change of use should be required. We insist on that for all sorts of other businesses, and I believe the same should apply to holiday lets.

Those are all good steps, and I want to put on the record my thanks to the Secretary of State and other Ministers who have listened and taken on board what we have said. The measures, which go towards addressing the issue, have been welcomed in Cornwall, but we need them to be implemented. We cannot allow the situation we have experienced in Cornwall in recent years to be repeated.

Although the measures are not a silver bullet, they provide some answers and enable us to improve the situation significantly. I ask the Minister to provide an update on when we can expect the register of holiday lets and the planning change of use requirements to be implemented, because we need them as soon as possible. I would also be grateful for the Minister’s thoughts on the impact that the situation is having on parish councils. What can be done to assist parish councils, which are losing their ability to support their local communities?

As I have laid out, the situation we face in Cornwall is complex and serious. I welcome the steps the Government are taking, but we need to see them implemented as soon as possible, because we need to be able to intervene. The situation we have seen in Cornwall in recent years can never be repeated. We need to work together to ensure that it improves as soon as possible.

I am not ashamed to plug our wonderful city, as it really has it all. As we approach Christmas, an especially important time for all local and independent businesses, Chester is filled with visitors experiencing the city’s Christmas charm. In fact, this year Chester has been recognised in multiple “best Christmas shopping destination” and “best Christmas market” lists. It even took the top spot as The Times’ prettiest city for Christmas shopping.

It is important to recognise that short-term lets are a part of the infrastructure of the UK’s visitor economy. Holiday cottages, holiday homestays and self-catering apartments have long catered for the needs of tourists, people travelling for work or those in need of overnight accommodation. However, the guest accommodation sector has changed significantly over the last 15 years in England and across the world. In particular, there has been a major expansion in the number and range of accommodation suppliers operating in the market. At the heart of this change has been the emergence of the sharing economy and the growth of digital platforms. It is important to strike the right balance and address the long and short-term impacts of this expansion.

In Chester and many other communities across the country, short-term lets are eroding the supply of housing in the private rented sector, which in turn is driving up rent prices for hard-pressed families. As someone who knocks on doors in my city, it grieves me to see former social housing, sold under right to buy into the private rented sector, now being used as short-term lets and to know that this supply of accommodation has essentially vanished.

Around a quarter of renters in the UK spend more than 40% of their income on rent, compared with just 5% of renters in Germany. This situation needs to be addressed urgently. Although I have been a Member of Parliament for just short of a year, I followed this issue closely while I was a councillor for the city centre in Chester. I was proud that while I served as council leader we started to build council houses for the first time in 40 years.

In all this time, not enough has been done to prevent the inevitable and address the specific issue of short-term lets. The message is clear: local authorities are struggling to cope with high concentrations of short-term holiday lets. They need to be given the powers to protect the sustainability and cohesion of their communities. The hon. Member for St Austell and Newquay is right: it is hard for local authorities to estimate how many properties have been given over to this use currently.

Will the Minister say what plans the Government have to address the wider housing crisis that my constituents face? What plans do the Government have to address the complex and unique challenges that arise with the rapid expansion of short-term lets in tourism cities such as Chester with a thriving visitor economy?

What can the Government do to get the balance right on policy and regulation so that people can get on the housing ladder in tourist destinations? First, I welcome the Government closing tax loopholes for short-term holiday lets. It was a hard-fought campaign by Conservative MPs in the south-west to close the loophole that allowed second-home owners to avoid paying council tax by registering as a holiday rental, signing up for business rates, and then receiving business rates relief. To be business rated, properties will need to be available to let commercially for 140 days a year and actually let commercially for 70 days a year. That levels the playing field.

Secondly, the Government’s proposals for greater regulation include a registration scheme, which would help local authorities to monitor compliance with key health and safety regulations and give them much-needed data on activity in their area. The scheme will not just be another burdensome form-filling exercise for property-owners: the data will be critical in helping local authorities as they look to use new planning powers to restrict the way in which homes can be flipped into short-term lets. The Government consulted on the proposals over the summer but have yet to respond to the consultation. I urge the Minister to press on.

Thirdly, I believe that the Government can go further. When we build new homes, there is a risk that they get snapped up by property investors to rent out as short-term letting accommodation, which is why the Government must not only build new homes in the right places but make sure that they get into the right hands. Councils that can demonstrate a high number of holiday lets and second homes in their area should be able to reserve a percentage of new builds for people with a local, family or economic connection to that area.

At the moment, local planning authorities can impose on new developments a planning condition called a local connection test, but I am not aware of councils readily using that power to make sure that local people get first dibs on new homes specifically in tourist destinations. That is why I would like to see councils being able to reserve a percentage of new builds for people with a local, family or economic connection to the area. Under my proposal, the purchaser would have to meet conditions, such as living or working within 25 miles of the property, being born within 25 miles of the property, or having a care network within 25 miles of the property.

Ultimately, we need to strike a better balance, to help local people to rent or buy a home while also supporting tourism.

With such high demand, rent is rising faster than the national average. The average increase was 4.9% in England last year and 6.3% in York. It is becoming more inaccessible to rent or to buy and, as so many colleagues have said, that is partly because of the rise in short-term holiday lets. According to AirDNA, we have more than 2,000 such lets in the city, with a 29% increase between August 2021 and August 2023. As a result, we are struggling. We need to bring in regulation.

It is 891 days since I first raised this issue in the House and we are no further forward. It has been 355 days since I introduced a private Member’s Bill in the previous Session. As we heard, the consultation closed on 7 June but we are still waiting for the outcome. Will the Minister say when the Government will bring forward the response to the consultation and legislate to help constituents like mine?

We have heard about using local revenue to address this issue, but there is also national revenue. We have to make sure that whatever system is introduced is compatible with His Majesty’s Revenue and Customs, because many people do not pay tax on their property to the Treasury. Some estimate that as much as £6 billion is missing. There is a lot we can do with £6 billion, so we need to address that deficit.

There is a particular issue with the impact of our visitor economy on housing. Will the Minister—and, indeed, the shadow Minister—consider setting up a taskforce to look at the specific issues that press down on the urban, rural and coastal communities with a prevalent visitor economy to ensure that we can address the issues in such areas? The hon. Member for St Austell and Newquay mentioned the impact on the local economy—people are clearly needed in the jobs but unable to live in the area—and our vital public services are not able to provide the staffing required to serve the local community. We also know about the impact on our communities.

Finally, I want to raise the issue of York’s local plan. We are still waiting for its approval. Next year we will mark 70 years as a city, without a local plan. Developers are taking advantage of the lack of a plan and, as many colleagues have said, building high-value accommodation when we have a real need for social and affordable housing in the city. I ask for that plan be expedited so that we can get on and start developing the housing that the city needs.

I have spoken before about how the planning system does not account for or factor in the challenges that face rural communities, but I want to focus on a particular problem that is acute in tourist destinations: short-term holiday lets and Airbnbs. In North Devon we have seen a 67% drop in the availability of long-term rentals since the end of the pandemic. Swathes of landlords have evicted their tenants from long-term homes to flip them into short-term lets, and they continue to do so. This week it was reported that the rate of section 21 evictions in Devon was higher than last year.

I know that short-term lets and Airbnbs bring a range of benefits to our tourism economy, but they really have affected the availability and affordability of local rental housing and have inevitably inflated house prices. We must rebalance our housing market so that local people can live and work in the area. I know that the issue of short-term lets will involve cross-Department collaboration; to rebalance the long and short-term rental market, we urgently need to look at the taxation inequalities between those two sectors that were introduced by George Osborne and came fully into effect during the pandemic.

I place so much emphasis on short-term lets because they are properties that would otherwise be let to local people for them to live in all year round. At this time of year, so many of them are empty, creating ghost communities. We have started to make strides with the Levelling-up and Regeneration Act 2023, and I welcome the Department for Culture, Media and Sport’s consultation on a registration scheme for short-term lets, which is a crucial first step for communities to have their say on the availability of housing to rent or buy in their local area. However, I join colleagues by asking, as with so many consultations, what is happening now? I know the consultation has been completed, and my understanding is that there was much support for a scheme, which is now long overdue despite being supported by the industry.

Fundamentally, there needs to be an increase in housing overall, but not just any housing. Indeed, I oppose housing targets because North Devon had built to target, but there is still nowhere affordable for anyone to live. The current preferred design for local housing seems to be massive executive homes, which push property prices ever higher. Communities cannot function without carers, teachers, doctors and nurses, yet they are being forced out because there is simply nowhere for them to live. It is not right that families are about to spend their second Christmas in a holiday park because of the lack of homes.

When the Devon housing commission visited, it observed that we have net migration of retired people into North Devon, and the housing that is built also reflects that trend. Indeed, why would people not want to retire somewhere so stunning? But that puts further pressure on public services, which struggle to fill vacancies due to the housing situation. Yes, we need to build more houses, but the crisis is urgent and we need quick solutions.

There are existing derelict buildings that could be converted into housing. There are liveable areas above shops that could be converted into flats, but that has been stopped because of an 84-year flood risk. People need housing now and every option should be looked into, as the situation will only get worse without intervention. Given this opportunity, I commend to the Minister my council’s Ilfracombe proposal. In North Devon, we are at risk of creating a cross between a care home and a holiday park, and we do not have the staff for either. Tourism is essential to our economy, but it cannot be at the expense of local people finding a home. We can and must find a balance.