Welsh government announces measures to address second home growth

Second home owners in Wales may have to register their homes and face higher taxes under plans set to be developed this summer.
Houses in Aberaeron, Ceredigion, Wales.

The Welsh government has announced a series of measures to address the impact of growing second home ownership on Welsh communities.

The government’s “three-pronged” approach will focus on addressing the affordability and availability of housing, introducing a new statutory registration scheme for holiday accommodation, and using tax to make sure second home owners make a fair contribution to the communities in which they buy.

The move comes after last year, Wales became the only country in the UK to give local authorities the power to charge a 100% council tax increase on second homes.

Julie James MS, minister for climate change with responsibility for housing, said: “The continuing rise of house prices mean people, especially younger generations, can no longer afford to live in the communities they have grown up in. A high concentration of second homes or holiday lets can have a very detrimental impact on small communities, and in some areas could compromise the Welsh language being spoken at a community level.

“We have already taken strides on some of these issues – last year we became the only nation in the UK to give local authorities the power to introduce a 100% council tax levy on second homes. But the urgency and gravity of this situation calls for further intervention, which means real and ambitious actions are delivered at pace, to inject fairness back into the housing system.

“Our new three-pronged approach will kick-start a summer of action which will determine how we tackle this issue now and into the future. I am calling on all political parties across the Senedd to get involved in this, as we look to empower our communities to exercise their right to live in good quality homes, wherever they are in Wales.”

Over the summer, the government will develop a new support package to be trialled in a pilot area in Wales, which will be evaluated before being considered for wider rollout.

Ministers will also start work on framing a registration scheme for all tourist accommodation and consulting on possible changes to local taxes to manage the impact of second homes and self-catered accommodation.

A draft Welsh Language Communities Housing Plan, to protect the interests of Welsh language communities, will be published for consultation this autumn.

One organisation making the most of Wales’ new council tax levy is a Community Land Trust in Solva, Pembrokeshire, which is using money raised by the levy to build 18 new affordable homes for local people.

Josh Phillips, chair of the Community Land Trust, said: “The current housing market in Pembrokeshire is at an all-time high with properties locally being snapped up for well above asking prices. The Solva Community Land Trust is a pioneer development for community led housing in Wales and hopes to deliver 18 properties locally within the next 3 years. Our vision is to create housing that is affordable and environmentally low impact, helping to stem the tide of young people having to relocate and draining our community of their energy and talents.

“Although Solva CLT is a fledgling project, significant work has been undertaken and we are well on our way to beginning the development in the coming months through our partnership with ateb and Pembrokeshire County Council. Our utilization of second homes taxations means the project is the first step in delivering community led housing in the county.”

Rachel Kelway-Lewis, from Solva, said: “Since the pandemic and the increase in home working, more people are looking for property here, with some houses going for over £500,000 and selling extremely quickly. Some of these houses will be vacant for much of the year, or are used as Airbnbs rather than renting to locals, increasing rent prices for us, too.

“All of my friends are experiencing the same issues. We’re working full time but we can’t buy or even rent in the local area, unless we’re lucky enough to have financial help from our parents. Lots of my friends have had to move away to get on the housing ladder.

“We need opportunities for young people like me to remain within our community and contribute to our local economy – so it’s great to be heard by the minister and know she is doing something to help us out and tackle the issue of second homes, which is creating a demand us locals simply cannot currently compete with.”

Image: Houses in Aberaeron, Ceredigion, Wales. Credit: Pixabay.

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