The Farmers’ Union of Wales’ (FUW) Diversification Committee has highlighted the need for the Welsh Government to take robust action to protect rural communities from the impacts of second home ownership and other factors that are depleting local housing.
During a FUW Diversification Committee meeting held on Thursday 14th October during which the Welsh Government consultation on local taxes for second homes and self-catering accommodation was discussed, delegates expressed acute concerns regarding the impact second home ownership and similar factors are having on the affordability and availability of homes for local people, and how this is threatening the rural communities of Wales.
Around 60% of residents are currently priced out of the housing market in Gwynedd and around 11% of the county's entire stock is being used as second homes. However, the problem is one that impacts areas across Wales and is continuing to grow.
The massive rise in second home ownership and houses purchased by outside investors as AirBnB type accommodation since the beginning of the pandemic has added to existing problems.
The Committee recognises the importance of tourism and self catering accommodation to the economy, but many coastal and rural villages in Wales are seeing their communities devastated, with serious implications for Wales’ heritage and culture.
In considering the Welsh Government’s consultation, the Committee highlighted a number of moves that the Welsh Government and other authorities should take to stem the impact.
Loopholes need to be closed that currently allow second home owners to avoid paying the council tax premium many local authorities are now implementing by registering their properties as short-term holiday lets and claiming non-domestic business rates.
This needs to be monitored and policed properly given that there are currently large numbers of second home owners artificially claiming Small Business Rates Relief as non-domestic holiday lets, meaning local people are picking up the lion’s share of the costs in their local communities through their council tax.
The thresholds which allow such houses to quality as business properties also need to be raised - local people who have diversified into self catering accommodation are genuine businesses which make that accomodation available for most of the year, not just for a part of it. Yet under the current rules, accommodation must only be available to let for around a third of the year to be eligible for rate relief.
Raising this threshold would avoid blanket changes to business rates which would unfairly target farms and others which had diversified into genuine self catering type enterprises.
The committee also proposed changes to the planning rules which would require change of use permission in order to change a domestic property into a second home or a holiday let, and a quota for local communities that ensures a fixed percentage of houses within a community are available for local housing needs.
For some communities it may already be too late, but robust action needs to be taken urgently, including granting additional powers to local authorities to deal with such matters, before this becomes an even worse problem in the majority of Wales’ rural communities.
The FUW will be highlighting such concerns and possible solutions in its response to the Welsh Government’s consultation on local taxes for second homes and self-catering accommodation which closes on 17th November 2021.