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‘Out of control’ holiday lets and second homes cutting off supply of new housing

Nick Cheek
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Nick Cheek

The rapid expansion of holiday lets and second homes is cancelling the supply of new homes in some parts of the country, research has shown.

According to Generation Rent, around 80% of holiday homes during and since the pandemic have been concentrated in 25 local authorities.

The report said that around 75,754 new homes have been built or converted between 2019 and 2022, but around 29% of these have become second homes or holiday lets.

The research found that Portsmouth was hit hardest, with every four homes built between 2019 and 2022  becoming holiday homes.

In other areas, over 90% of homes added were holiday homes, with Copeland in Cumbria reporting 96% of homes added during the period being holiday homes.

In Leicester, 91% of new homes built were holiday or second homes.

In Torridge, Devon, 63% of new housing supply were holiday homes, with the same figure noted in South Lakeland in Cumbria.

Around 56% of new homes in Scarborough were holiday homes, with this percentage falling to 49% in Richmondshire in North Yorkshire and 42% in North Norfolk.

The worst impacted London borough was Southwark, with 61% of new homes becoming holiday homes during the period.

‘The holiday let sector is out of control’

Generation Rent said that the growth in holiday homes made it more challenging for council to accommodate local people affordably.

The report said that holiday lets represented around 4% of growth in housing stock nationally, with around 26,043 second homes or commercial holiday lets registered between 2019 and 2022.

The Government launched a consultation on registering holiday lets and requiring owners to have planning permission to let to tourists. This is due to close on 7 June.

The registration scheme for tourist accommodation is set to let existing holiday lets get automatic permission, according to Generation Rent, which it said would increased their value and make it more difficult to bring them back to the residential sector.

The organisation is calling for local authorities to have heightened powers to license holiday lets and cap their numbers and withdraw tax breaks.

Dan Wilson Craw, acting director of Generation Rent, said: “The unregulated and undertaxed holiday let sector is out of control. It has taken homes away from locals who grew up in holiday hotspots and people who want to work in the tourist industries, making these areas unsustainable.

“A large part of the solution to high rents is more housebuilding, but locals won’t see the benefits of this if houses continue to leak into the holiday homes sector.”

He added: “It is welcome that the Government is looking at ways to regulate holiday lets, but there is a huge risk that the proposals will lock in the sector’s recent growth and make it harder to bring down rents by switching properties back into residential use.”