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Kevin Foster (Torbay) (Con)
I beg to move,
That this House has considered short-term holiday lets and the planning system.
Let me start by thanking my colleagues on the Backbench Business Committee for agreeing to schedule the debate and the Members from across the House who agreed to support my application. I also want to thank Parliament’s participation and digital teams, who helped to ensure that those who signed relevant petitions were aware of the debate and helped to gather evidence of the impact of the issue across the UK.
The issues with our housing supply do not have any simple resolution or magic bullet solution. Many factors need to be considered and approaches need to be taken, including reform of our planning system to ensure we can deliver a relentless focus on regenerating brownfield sites and our town centres. The subject of today’s debate—planning—would not on its own resolve the pressures on housing in coastal areas such as Torbay. I will not argue that we should use changes to the planning system to ban all new short-term holiday lets, yet changes in that specific area could make a real difference and the issue needs to be addressed, not least to give confidence to local authorities when granting planning permission for new housing in popular areas for tourism such as Devon and Cornwall. It would mean new homes would become available rather than new holiday accommodation.
The focus for today is on how we can create a planning system that gives local communities the ability to strike the right balance between opportunities to create different accommodation options for tourists and ensuring there is a supply of housing for the local community, which is vital in providing the staff and services to support the visitor economy without which the tourism short lets would not exist.
Selaine Saxby (North Devon) (Con)
Does my hon. Friend agree that in addition to the work within the Department it is vital that the Treasury looks to rebalance the tax inequalities between long-term and short-term rental if we are to secure places for people to live in our beautiful constituencies?
Kevin Foster
My hon. Friend is absolutely right to highlight that. A range of factors go into the pressures that push some landlords from long-term residential lets to short-term holiday lets. Factors include the system of taxation and whatever wider regulation is in place for landlords. We might also consider what incentives we can provide for people to build to rent. If a company builds a property specifically to rent it as a home, they are likely to offer longer-term tenancies and the landlord is highly unlikely to want to move back into the property, which is one reason why a residential tenancy might come to an end. My hon. Friend is right to highlight that the issue is part of a wider debate about how we ensure there is an adequate supply of housing in our constituencies so that organisations such as the NHS can recruit staff. We have reflected on that issue before. If people cannot find somewhere to live in the local area, clearly they will not take up jobs in that area. That goes to the heart of the debate.
To expand my argument I should define what I mean by a short-term holiday let. The term “short-term letting” is most commonly used to refer to the offering of residential accommodation to paying guests. It can include single rooms within a shared premises or the letting of an entire premises such as a house or flat. Short-term lettings are distinct from private residential tenancies because they do not require the occupier to treat the property or part of it as their principal home. They are also distinct from other forms of guest accommodation such as hotels or hostels as the lettings are in premises that could or would otherwise be used as a permanent residence—in essence, a home.
There is evidence that the number of short-term lettings in England has increased significantly in recent years, particularly because of the development and growth of the sharing economy and peer-to-peer accommodation services such as Airbnb. Those online platforms essentially provide marketplaces that connect people who want to rent out their properties or spare rooms with people seeking short-term accommodation.
Daisy Cooper (St Albans) (LD)
I am grateful to the hon. Member for making those points and for giving way. He will be aware that platforms such as Airbnb have been calling for a register of short-term lets for a long time. Does he agree that a register is precisely what the industry wants because that would allow it effectively to nick properties from other platforms? However, what communities need is their local planning authorities to have the powers to decide on the number of short-term lets and whether to renew licences when there has been antisocial behaviour.
Kevin Foster
First, I would gently point out that the debate is focusing on the planning system and giving local councils the ability to prevent overconcentration in particular areas, as well as having an eye to the wider housing situation when deciding whether a property should be converted.
On the allied issue of putting a registration system in place, my own tourism industry would like to see that, and having a register of properties being used for this purpose would make it easier to do certain compliance checks. If people were in breach of lease obligations, whereby they might not be allowed to sub-let a property by the freeholder, that would be highlighted.
A register needs to be seen as part of a range of measures, but it is worth noting that a wider regulatory system would be introduced once there was a register of such properties. Today, however, the focus is clearly on the planning system and how we could empower local authorities on behalf of their local communities to shape the housing market in this area to ensure that we do not see streets that should be providing residential homes becoming holiday parks.
Owing to the issues with registration, or the lack of registration, it is hard to get exact numbers for the properties involved. However, I note the report by Alma Economics commissioned by the Department for Digital, Culture, Media and Sport to analyse the results of its recent consultation on developing a tourist accommodation registration scheme in England. The report concludes that although there is no single source of data on short-term lets in England “one plausible estimate” is 257,000 properties in 2022.
Another piece of analysis, which was undertaken by the charity CPRE—the Campaign to Protect Rural England—looked at property data collected by AirDNA on Airbnb and similar platforms, and estimated that 148,000 properties in England were being used for short-term lettings in September 2021. That analysis points to what makes this a core issue for those of us lucky enough to represent beautiful parts of our United Kingdom such as Torbay, where tourism is one of the main drivers of our economy owing to its concentration in the area.
Further analysis from CPRE confirms that some areas have seen a dramatic increase in short-term lettings in recent years. For example, in Cornwall, short-term listings increased by 661% in the five years to September 2021. While Airbnb is one of several providers of listings of short-term lets, it is the best known company operating in this area and is generally held to be leading the market, with its name becoming synonymous with such activity.
Kevin Foster
I am going to make progress because I want to give other Members the chance to speak.
Let me put a scale on the activity: analysis by financial services company Moore Stephens suggests that in 2018 Airbnb was about a third of the size of the hotel sector in London. Discussion on the growth of short-term lettings tends to focus on Airbnb, so there has been much analysis of its numbers in particular locations, but that still does not capture the whole picture. Hence the need for a registration scheme.
I welcome innovation in our tourism industry, and I recognise that Airbnb has met a demand for a different type of accommodation offer, which visitors are looking for. Previous generations developed new offers for visitors, such as holiday parks that could offer a package deal to workers who, between the wars, were able to take paid holiday leave for the first time. That followed the innovations of Victorian pioneers, who used the ability to travel created by the railways to build mass market tourism, which prompted the dramatic expansion of many coastal resorts, including Paignton and Torquay. The outcome of the debate should not be us concluding that we should seek to end such use; it must be that a balance needs to be struck, and that powers need to be created to achieve that balance in areas where large numbers of such properties already exist, and local housing supply is constrained.
We should not start by assuming that a property listed as a short-term holiday let would otherwise be a family home. Caravans, feature properties and specially built holiday accommodation centred around an owner’s residence, such as a block of small holiday cottages on a farm or hotel site, or in the grounds of another property, are unlikely to be available to rent more generally, but there are growing signs that property owners have moved to end the use as homes of properties that were built as and intended to be residential housing, in some cases evicting families to do so.
In my local surgeries, I have seen cases of that nature, and Torbay Council often has to try to find a solution at the public expense. I also note the examples highlighted as part of the survey conducted with the aid of the parliamentary engagement team, which saw 188 people get in touch. Many of the replies were from the south-west, including one from Martin, a constituent of mine. He stated:
“If you complete a search for short term holiday lets in Torbay, you now get 1,000+ returns. This is an increase of over 500 in just a 2-year period. This is a significant reduction in the availability of private rented accommodation in the Bay, causing rentals to jump in cost, and some residents to become homeless at the end of their tenancy.”
There is also Terry, who stated:
“Short-term holiday lets have had a catastrophic impact on housing availability...Post-covid the housing dynamic in my town changed as many private landlords sought to capitalise on a thriving holiday market and flipped their private rents to holiday lets. This meant a flurry of Section 21 notices with no alternative private tenancies available.”
Then there is Mark, who stated that he represents a local campaigning group:
“We are not against holiday lets; many of our members work within the industry. What we want is to give our local council the powers to balance the needs of the economics of tourism with the basic human need of local families to have a safe, affordable place to live”.
I appreciate that the practice brings greater reward for some property owners, but unchecked growth and overconcentration create a danger of undermining the very tourism sector that makes it possible.
There is not just a moral case for preventing families being made homeless to create new tourism accommodation, but a pressing economic one. Tourism relies on many key workers; without them, it cannot function. Similarly, tourism relies on a range of other services to support it, including health, retail and transport. If workers in those sectors cannot access a home in the area concerned at a price at which they can afford to rent or buy, it inevitably creates recruitment issues.
I accept the argument that a key part of tackling the problem is ensuring that a supply of new homes is created in the community concerned. I have spoken before about the poor record on delivering affordable housing of the Lib Dem-independent coalition that ran Torbay Council until the recent elections, and it will not be alone. Preventing more existing properties from being converted into short-term lets will not create the new ones needed, but that will take time while the impact of conversion is immediate. It is also not unprecedented to restrict types of uses in some locations. Houses in multiple occupation—HIMOs—are a useful part of our housing supply mix, yet we rightly allow councils to limit their numbers in specific locations to ensure that an excess concentration does not create serious issues for a specific community.
Many of the problems cited in areas where there are large numbers of short-term holiday lets sound similar to those with HIMOs. Impacts may include noise disturbance, antisocial behaviour, inappropriate disposal of food waste and general refuse, and reduced security. For example, the Greater London Authority reports that in the five London boroughs with the most Airbnb listings—Camden, Kensington and Chelsea, Southwark, Tower Hamlets and Westminster—there have been numerous complaints related to short-term letting activity, with Westminster reporting 194 complaints regarding noise, waste and antisocial behaviour in one year.
There are also issues with health and safety, along with fire regulations. Bitter past experience, including deaths in hotel and guest house fires, has led to a system of protections being put in place, yet there are concerns that the type of protections at a small guest house may not be replicated at a large property being used as a short-term holiday let. Such matters could be dealt with through registration, which means that compliance inspections can be made, yet they could also be helped with by ensuring that planning permission is sought before conversion to such use. There are also tax and business rates issues, but those are matters for another debate; our focus today is on the planning system.
Given the impacts, I was pleased when the Government honoured the commitment they gave to those of us who signed an amendment calling for change during the passage of the Levelling-up and Regeneration Bill by launching a consultation on planning measures to give local authorities greater control over the number of short-term lettings in their area when that is an issue. The proposals include creating a new use class for short-term holiday lets to distinguish them from dwelling houses—a key point in dealing with the issue—and introducing permitted development rights for dwelling house to short-term holiday let conversions and vice versa so that planning permission would usually not be required for those changes. Crucially, they also include giving local planning authorities the option to revoke the permitted development rights in their area using an article 4 direction. I am aware that the consultation closes on 7 June, and I encourage all those with an interest in the matter to take part.
I appreciate that my hon. Friend the Minister will not be able to pre-judge the consultation, but she will know that there is a danger that if there is a protracted period of time between the announcement of the Government’s intention to change the system and their actually doing so property owners could seek to beat the deadline, exacerbating the issue that we seek to control. First, can she assure me that if the Secretary of State concludes changes should be made, she has engaged with local authorities about how quickly they can be implemented? Secondly, what thought has she given to ensuring that the outcome is not a closing-down sale, with a rush to convert before the new rules apply? Thirdly, has she ensured a slot has been secured for any legislative change? Fourthly, although I appreciate the need for consistency in standards and the application of terms, will she ensure that councils can set a policy in all or part of their areas, depending on local circumstances?
An appropriate level of short-term lets can create choice and attract visitors, yet families being evicted from their homes to create holiday accommodation is unacceptable. Requiring planning permission would give local authorities an opportunity to decide the right balance in their area while protecting family homes and giving those deciding on planning permission confidence that new housing developments cannot become a new holiday park. The current position is not sustainable; key workers are being priced out, and the very industry the properties rely on—tourism—is being damaged. It is vital that change comes, and I hope it comes quickly.
Dame Caroline Dinenage (in the Chair)
It does not take a rocket scientist to figure out that quite a few Members wish to speak. I will start to call Front-Bench spokespeople around 10.28 am. We are looking at a guideline of five minutes each. I will not impose it, but I prevail on Members to use their discretion in keeping to that time.
Tim Farron (Westmorland and Lonsdale) (LD)
It is an honour to serve under your tutelage and guidance, Dame Caroline. I pay tribute to the hon. Member for Torbay (Kevin Foster) for securing the debate and leading with a very thoughtful introduction. Without wasting time, I endorse all the wise procedural questions he asked the Minister, who can take them from me as well.
We are talking about the problem of short-term lets. Representing the lakes, dales and other beautiful parts of Cumbria, I want to say clearly that we value the tourism economy. It is of massive significance, with 20 million visitors a year and 60,000 jobs in the sector. It is not just about the economy; we believe we have a duty to steward that beautiful part of the world for others to visit.
We are a national park where people can visit the Brathay outdoor education centre on Sunday, or the Outward Bound Trust centre at Ullswater. We live in a place that we want people to visit. It is a privilege to do that and to look after them. We are not denying that holiday lets are an important part of the tourism economy. There needs to be visitor accommodation, and that includes Airbnb, which is a neutral platform. The rules within which it operates are the problem.
We have to accept that, in my part of the world and that of many others in the Chamber today, there is not just a housing crisis, but a catastrophe. There are three principal causes: a lack of genuinely affordable homes being built; excessive numbers of second homes gobbling up full-time residential accommodation; and a short-term rented sector that has gobbled up the long-term private rented sector.
The register looks like an important step in tackling issues to do with standards and quality but clearly, as alluded to by the hon. Member for Torbay, it is a potential window to creating a separate category of planning use, which is necessary if we are to allow authorities such as the Lake District, the Yorkshire Dales and Westmorland and Furness local authority the opportunity to regulate and keep a high minimum of long-term properties available for local people to live in.
The pandemic saw lots of things change. One was the stamp duty holiday, introduced by the now Prime Minister when he was Chancellor of the Exchequer, which saw a massive boost in the number of second homes. Of all house sales in that period, 80% went to the second-home market in my part of the world. We saw an enormous increase of long-term rented properties collapsing principally into Airbnb, largely because the Government did not scrap section 21 evictions at the time they said they would.
The consequences are huge and human. I think of the couple with two small children in Ambleside, she a teaching assistant and he a chef. They were evicted from their flat because the landlord wanted to go to Airbnb. They had literally nowhere else to go, so the children were out of school, a teaching assistant was lost to the local primary school and a chef lost to a local hotel. They had to move 25 miles away and out of the area.
In Sedbergh, a relatively small town in the dales at the end of my constituency, 25 households were evicted at the same time—all chasing zero homes available for long-term rent. I think of a mum and her 15-year-old son, who lived their entire lives in a village just outside Grange before they were evicted. Again, there was nowhere they could remain within the community. When people are evicted, there is nowhere else to go.
I have some quick figures. There are 232 long-term rental properties available in the whole of the county of Cumbria, and there are 8,384 short-term lets, of which 75% are Airbnbs. When someone is kicked out of their home because their landlord wants to turn it into a short-term let, there is literally nowhere they can go in their community. The consequences are vast: hollowed-out communities, schools with falling rolls—many really good schools have seen 20% to 30% of their rolls disappear in two or three years—and a national park that only very wealthy and privileged people can afford to visit and stay in. It is devastating for our economy, too: 83% of hospitality and tourism businesses in Cumbria report that they have difficulty in recruiting staff. Some 63% are operating below capacity and are unable to meet demand because they cannot recruit the staff. That is for the tourism economy, which is worth £3.5 billion a year in the lakes and the dales of Cumbria. We are under-meeting the demand that exists because of a lack of staffing, as there is nowhere for people to live.
It is not just the tourism economy that is affected, but the care sector and other professions. At one stage, earlier this year, 32% of hospital beds in Morecambe bay were blocked. Why? The bottom line is that we cannot get people out of hospital because there are not enough carers. Why? Because there is nowhere for them to live.
What the Government are proposing may be locking the stable door after the horses have bolted, but I am glad that at least they are thinking of doing that. I am optimistic about a better and fairer housing market in the lakes, the dales and elsewhere in Cumbria, but it will need ambitious regulation. Part of my frustration is that this catastrophe is avoidable and obviously fixable. Short-term lets need to be a separate category of planning use so that local authorities can ensure that there are enough homes, not just in national parks but in places such as Grange, Kendal and Appleby.
The Government also need to tackle the number of second homes, although they show no intention of doing so. Why is a separate category of planning use not being considered for second homes? It is good that the Government have allowed local authorities to double the council tax on second homes, and we in Westmorland and Furness are gladly doing that. We also need to tackle the issue of new homes being affordable, which does not mean £300,000 a year. It requires giving not just national parks, but authorities outside them, the ability to say, “The only things you can build here have got to be affordable and available for local people.”
The housing catastrophe can be overturned, but with the Government planning to think about tackling only one of its three causes, those of us in Cumbria and communities like ours will remain of the view that this Government do not understand much, do not care much either, and are rather taking us all for granted.
Simon Jupp (East Devon) (Con)
I thank my hon. Friend the Member for Torbay (Kevin Foster) for securing this morning’s debate on short-term holiday lets and the planning system.
I represent a glorious part of the UK. It is understandable that many people want to visit East Devon year after year: we have the Jurassic coast, stunning food, rolling hills, country pubs, quaint bed and breakfasts, and historic attractions. Many jobs in our communities depend on visitors enjoying the variety and availability of accommodation options. Visitors, in turn, spend money locally year after year.
Homeowners benefit from the flexibility offered by short-term lets. For many, it is an important second income at a time of high inflation. However, the soaring numbers of short-term lets and second home ownership make it more difficult for so many local people to own a home of their own. I live in Sidmouth, where a glance at the estate agent’s window reveals the reality: local people are being priced out of the market. It is a similar story in Beer, Branscombe, Budleigh Salterton, Exmouth, Topsham and Seaton. Many local people find it increasingly difficult to get on the property ladder, given the high prices advertised. Homes are often being sold to cash buyers from elsewhere within days of being advertised.
I hope the key message of today’s debate will be that we need to get the balance right. Homes to buy and for long-term rent are out of reach for many people who grew up in Devon, like me, or who work locally or need the support of family to look after a loved one. Our country and our county need strong communities all year round, not places that are ghost towns half the year. What have the Government done, what will the Government do and where could the Government go further?
Simon Jupp
I have a short speech, so I will make some progress.
The Government have been listening to the concerns of colleagues, particularly those who represent tourist hotspots in Devon, Cornwall, Norfolk, the Lake district and Yorkshire. There have been welcome measures. The Government have already introduced higher rates of stamp duty for additional properties. They have closed business rate loopholes. They plan to let local authorities double council tax on second homes, as has been mentioned. That is a great start, but more action is needed, specifically on short-term lets. That is why I welcome the introduction of a registration scheme through an amendment to the Levelling-up and Regeneration Bill, which will bring short-term lets up to a higher standard and provide much-needed data on activity in local areas.
This debate is timely, because the consultation on how the registration scheme will be administered is still open; it closes in roughly a fortnight. There are also plans to restrict the ways in which homes can be flipped into short-term lets by bringing in new permitted development rights for a change in use from a C3 dwelling house to a C5 short-term let. Councils would then have the option to limit the use of those permitted development rights, such as in certain geographical areas with the highest number of short-term lets. Let me tell you: East Devon is definitely one of those.
The consultation is running in parallel to the one on registration schemes, which also closes soon. It is right to give local councils all the tools they need. Those powers should not be mandated by Whitehall officials. Decisions will be made by local people elected at the ballot box. I hope that East Devon District Council will use the tools given to it by this Conservative Government.
Finally, there are areas in which the Government can go further. As I have mentioned before in Parliament, one policy could be to allow councils to reserve a percentage of new builds for people with a local family or economic connection to an area. For example, the purchaser or tenant could have to meet one of the following conditions: that they currently live or work within 25 miles of the property, that they were born within 25 miles of the property, or that they can demonstrate a care network within 25 miles of the property. A covenant would permanently protect a percentage of any new housing stock from short-term let or second home ownership. We undoubtedly need to build new homes in East Devon, but we should aim to look after locals first. The Government can be creative and proactive in looking at all possible options. Only then will there be a better balance.
Obviously there are two sides to this debate, and I do acknowledge that short-term holiday lets bring visitors to the places we love. Visitors contribute a great deal to our communities in East Devon, but their stay is often enjoyable only because of local workers behind the bar of a pub, in the kitchen of a restaurant or tapping on the till of a local high street shop. Those workers need somewhere to live, too. Our economy in East Devon would grind to a halt without them. We need a much better balance for our communities in East Devon for local people, now and for generations to come.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
We are here again talking about Airbnbs and second homes. On a cross-party basis, we are all still demanding action from Ministers. Some demand it louder and some demand it more politely, but the basic premise is that the Government are clearly not listening to the needs of rural and coastal communities because the level of action that is required is not being implemented. Time and again, in debates like this, we have heard that just tweaking this little bit here or that little bit there will make a difference. It will not.
We need to be honest about the scale of the housing crisis in rural and coastal communities, be honest that the pandemic turbocharged that housing crisis, and be honest about what needs to be done to change it. That is really important. There are too many people in rural and coastal communities, such as those I represent in Plymouth, who are being turfed out of their homes and seeing those homes being flipped immediately into Airbnbs with astronomical rates. The promise that section 21 evictions would be banned was given to families like the ones being turfed out. It needs to be delivered, but it has not been. That is a political choice. I encourage the Minister to bring forward the ban on section 21 evictions and make it proper.
We need more homes. The south-west has enough houses; we just do not have enough homes for people to live in. In Cornwall, there are 23,500 households on the housing waiting list and there are approximately 25,000 second and holiday homes. The solution is not to convert one to the other straightaway, but to recognise that if we want to address the housing crisis, we have to build more to protect people in long-term rentals and ensure that housing is affordable for everyone.
Working with Councillor Jayne Kirkham, the leader of the Labour group on Cornwall Council, and Perran Moon, our candidate in Camborne and Redruth, we put together our First Homes Not Second Homes manifesto. I presented it 18 months ago—pretty much standing in the same spot in the same debate—and I am glad that some of it has started to gain political traction.
I want councils to have more power, and not just to double council tax—we originally proposed quadrupling it. I think the Government could go faster in allowing councils to do that. I note that Cornwall Council, a Tory-controlled authority, has just written to the Government asking for the power to triple council tax, raising an extra £50 million a year. In a county such as Cornwall, that would be a really important part of this.
I want a licensing scheme to be introduced, but it is not enough just to have a licensing scheme. We need a very clear cap and floor so that local communities can decide how many second homes and Airbnbs are suitable in a community, to prevent it from being hollowed out. That is a really important part of a licensing scheme. It is not enough just to have a list; we need a floor and a cap to ensure that it works properly.
Then we need to build more—we need to build, build, build. In the words of the Secretary of State for Levelling Up, Housing and Communities,
“there simply aren’t enough homes in this country.”
We need to ensure that we have enough homes, not just enough houses. Scrapping the housing targets may have been good politics for the Prime Minister in keeping his own Back Benchers happy, but it is not dealing with the housing crisis in places such as the south-west. We need builders, not blockers, we need first homes, not second homes, and we need long-term lets, not just short-term lets. We also need to consider the profound consequences, one of which is the hollowing out of community infrastructure that comes from having too many Airbnbs and second homes in a community.
That is why we also propose a “last shop in the village” fund, created through a levy on empty second homes, that would help to support the last shop in a village, the last pharmacy, the last post office, the last pub or the last bus route. When those facilities go, communities are hollowed out. The community infrastructure that gels a community together and brings people together is lost and cannot be easily replaced.
Finally, we have argued—I still think this is needed—that we need to lock in a discount for local people. I like the idea of covenants: protected, stronger covenants for local people who work in certain industries. That is a really important part of recognising that we need a mixed economy in a community, but we need to do more of it and it needs to go further.
The reality is that second homes, Airbnbs and the planning system, which were once a niche issue, are now a regular issue in this place. We—nearly every single one of the characters due to speak today—will be back here in a few months’ time, repeating the same debate, because we are not seeing the level of action that is required. If we are speaking honestly, the Government are the blocker on this one. The Government could go further if they chose to do so. I encourage the Minister to take this message back to the decision makers in power: we need to see action on second homes, Airbnbs and the lack of affordable housing in rural and coastal communities before we truly hollow out those communities at an irreparable rate.
Derek Thomas (St Ives) (Con)
I thank my hon. Friend the Member for Torbay (Kevin Foster) for securing the debate and ensuring that a Minister from the Department for Levelling Up, Housing and Communities will respond. My hon. Friend has comprehensively set out why this debate is needed. Tourism is vital for my constituency, as it is for his. I have discussed the impact of holiday lets with the Tourism Minister, but although tourism sits with culture, media and sport, the effect of holiday lets needs to be addressed as part of the planning system, as we have heard. Holiday lets have grown by 661% in Cornwall in five years, according to the Campaign to Protect Rural England. That means that there is less property available for homes. I can assure the House that house building has not grown at the same rate, so the inevitable has occurred: families have lost their homes and the insatiable demand for housing goes on.
The consequence of this gold rush for short-term holiday lets, particularly because people have discovered through various TV programmes and the G7 that Cornwall is a great place to visit, is that prices are driven out of reach for local residents and for people who could become local residents. Like other Cornish MPs who are here today, I speak to NHS managers who are unable to persuade carers, nurses or dentists to relocate to west Cornwall, and to Cornwall generally, because they cannot afford to live there. I speak to businesses that want to expand, but that have the same difficulty with attracting staff. By taking action on holiday lets, we will not just level up on housing; we will also level up on health disparities and economic disparities.
The planning system exists to protect amenity in the public interest, but a disproportionate number of holiday lets hit amenity more than most developments, making schools, shops, churches and clubs unsustainable. Local authorities need the ability to protect their communities—a point well made by my hon. Friend the Member for Torbay. The Government are rightly consulting on a new use class for holiday lets, but we need a joined-up approach across Government.
As my hon. Friend the Member for North Devon (Selaine Saxby) correctly pointed out, there are incentives for landlords to switch from long-term rentals to short-term holiday lets, and landlords have followed the incentives. One in 10 holiday let companies were previously registered as buy-to-let businesses. I know we want to stick to planning, but this issue needs to be addressed across Government. Some of these incentives come from the Treasury, such as when it stopped buy-to-let businesses claiming their mortgage costs against tax. Those incentives will only get stronger as interest rates continue to drive up landlords’ mortgage rates. Will the Minister talk to Treasury colleagues so that both Departments are working in the same direction?
The Department for Energy Security and Net Zero has still not clarified whether it will act on its proposals to require rental properties to have an energy performance certificate rating of C or above. That means that landlords are already switching to holiday lets, which are not subject to the same minimum energy efficiency standards. Last July, the Government announced a review of the methodology used for EPC ratings. We all recognise that the current system is not fit for purpose and delivers wrong outcomes for the people living in the property. An update on the review would be welcome.
There is a lack of clarity about properties that will never be able to reach a C rating. The art deco flat owned by my constituent has curved windows that cannot be double-glazed and curved walls that cannot be insulated. It is not listed, so it may not be exempt; the only option then would be to use it as a holiday let. Will the Minister work with her colleagues in the Department for Energy Security and Net Zero to provide certainty and clarity on EPC standards for long lets and on the review of EPCs?
Finally, the Department for Levelling Up, Housing and Communities is increasing protection for renters, but the legislation must balance that with the rights of landlords. I hear the passion of Opposition Members about section 21, but landlords are already worried about what that will mean for them. People who have properties or were left properties and were thinking about providing long lets are considering turning them into holiday lets. One landlord put it to me that the Department has assumed that all landlords are Rachmans, and he was tempted to throw in the towel and switch to holiday lets. Will the Minister assure my constituent that private landlords are a valuable part of the solution to the housing crisis and that the Government will ensure that they are not replaced by holiday let businesses?
I suspect that there are constituencies that do not present the same pull factor for people planning their holidays, but in areas such as west Cornwall and Torbay, urgent action is needed to address the squeeze on housing for people who live and work in those beautiful parts of the nation. We love our tourism, but local homes are needed to ensure that strong local communities survive.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate. I thank the hon. Member for Torbay (Kevin Foster) for setting the scene. He and I are good friends; we are always in debates together, and it is a pleasure to be in a debate that he has initiated. I acknowledge the massive difference in planning and procedure between Northern Ireland and his constituency, but the need is the same and the case must therefore be made for UK-wide reform.
I say this unashamedly: I am privileged to represent the most beautiful constituency in the United Kingdom, Strangford. No matter what other hon. Members may believe, that is an indisputable fact. With that knowledge comes a belief in what could be achieved if we utilise that potential through tourism. Tourism is a key economic driver for my constituency and we try to promote it wherever we can. We have everything you would need for a short or long break: matchless views, superior dining and coffee houses, outdoor activities, beautiful spas—the possibilities are endless. Indeed, I know that the Minister was suitably impressed when she and her husband visited last year for just a taste of what we have to offer. I know she cannot wait to get back once again and enjoy the wonderful times that she had there. I am not sure if the weather was good for her, but hopefully it was.
One of the results of covid and the escalating price of travel has been that people have remembered the beauty of staying and holidaying within their own nation. With that has come an increasing need for accommodation: many people are eschewing traditional hotels and choosing Airbnb lets where they can take pets and children and enjoy the experience of different surroundings, but put their children to bed and watch a film together in the evening, or leave the dog in the house and go for a walk.
It has become clear that demand for short-term lets far outstrips what is available. That is why I support the ability to build small lets in their beautiful country gardens, so that they can gain additional income and bring tourism to the area. I will give an example. I know of one such request, on the beautiful Portaferry Road in Newtownards, which is the most incredible stretch of road in the entire area. It is an area of outstanding natural beauty. I am privileged to live on the edge of Strangford lough, which is one of the UK’s largest sea loughs and one of the most important wildlife habitats anywhere in Europe. Strangford lough—one of only three marine nature reserves in the UK—is a water wildlife paradise. If people are lucky, they may spot seals, basking sharks or short-beaked common dolphins there—that is some of the marine biology we have there.
It is little wonder that one canny local realised that there was untapped potential for short-stay lets at Strangford lough. He drew up the plans, he made the business case and he put in the application. The planners turned down the application, saying that it was not a permitted development, and gave no thought to the tourism potential, which would have allowed the council to meet its tourism aims. I am thankful that good sense prevailed, and a wonderful councillor on the planning committee, Alderman Stephen McIlveen, was able to skilfully highlight the wrong decision, using the planning policy. The decision was overturned, and we now have a lovely Airbnb, which is in high demand, bringing money to the local economy. We need a UK-wide change of policy, so that weight must be given in decision making to the needs of the tourism industry. It should not simply be that permission can be given if the officer agrees.
Richard Foord
Is the hon. Member familiar with the concept of the digital nomad, and would he want them in his constituency? The digital nomad is somebody who has a first home, but can work elsewhere, in a second home. Unlike the traditional nomad, who moves seasonally, those people often have more than one home. Would he agree that local authorities ought to have regard to the concept of the digital nomad?
Jim Shannon
I agree. The thrust of the debate so far has been that councils should have a say on what happens. We all understand the need to protect beautiful areas in our countryside, but protecting does not mean abandoning. Tasteful, small accommodation can breathe life into villages and coffee shops; that must be taken into consideration, but in Northern Ireland, it is not the standard position, so there are some things we must change.
Although not every application enhances tourism potential, it is time for the House to make it clear that there should at least be consideration of the legislative aspect of this issue. I ask the Minister to ensure that devolved bodies throughout the United Kingdom follow that trajectory. We have the capacity to make the most of international city breaks and local holidays, but to achieve that we must sow into our facilities. A change to the law is necessary to do that. I know that the Minister understands the issues and will reply to everyone’s requests in a sympathetic way, thus getting the ball rolling in the House today.
Anthony Mangnall (Totnes) (Con)
It is a pleasure to speak in this debate, and to support my neighbour, my hon. Friend the Member for Torbay (Kevin Foster). Across south Devon, we have been dealing with this issue for a long time. The debate comes down to a point of balance. If we are implementing measures to try to improve housing stock, then we are doing the wrong thing. Over the last three years, we have successfully worked together across the House to try to change the law around short-term lets. We changed the business rate loophole, so that there is an actual number of days that houses have to be let for. We changed council tax rates to 200% on empty and second homes. We are looking at how neighbourhood plans can take into account the amount of second homes when new houses are built. There is also the consultation, which has been mentioned time and again. A large body of legislation has not just being promised, but has already been delivered, and there is legislation currently in the House of Lords. It is not correct to say that nothing has been done, and that two years on, nothing has changed. A great deal has changed. The question, however, is: what is the intent? What are we trying to do? If we are asking for more houses, then we need to build more houses, and changing the rules around short-term lets will not deliver them. We must have that in mind in this debate.
The hon. Member for Westmorland and Lonsdale (Tim Farron) correctly mentioned how important tourism is to his local economy; it is the same across Devon and Cornwall, as he well knows, and of course across Strangford, too. In my area, 3% of the economy is based around tourism and hospitality, and we all understand the need to attract people to our area, and to find the employees to work in the visitor economy.
In Devon, there are 13,363 second homes. That is up by 11% from last year. In my constituency of Totnes in south Devon, there are 3,454 Airbnb lets. Madam Chair, if you were to take out your phone right now and look at Rightmove for a long-term rental property in my area, you would find only 34 properties, and they are unaffordable. The challenge for my constituency is in both being a welcoming area for second homes, and being a place where people can live and work. Day in, day out, my inbox is filled with correspondence from teachers, doctors, lawyers, nurses and others who want to live and work in the area, but who struggle to get into the housing market, either by buying or renting. We must consider measures to encourage more people to offer up housing for the long-term rental market.
It is interesting that we are having a conversation around section 21, because there is a debate this afternoon on that very subject and what we do about leaseholder reforms. We must have measures to encourage people to make their properties available for long-term renting, because across our constituencies—I would imagine that we are all in tourist destinations—not many of the houses put up for rent are in that long-term market. How we achieve that must be at the forefront of our mind when legislation is next brought forward.
We should start by thinking about unintended consequences. We are sent to this place to think about how we can improve situations. I suspect that that is exactly what George Osborne thought he was doing in 2015 when he changed the tax relief on mortgage interest payments. However, that change has completely disincentivised the long-term rental market and completely favours the short-term rental market. If people can receive three, four, or in some cases five times more rent from Airbnb than from the long-term rental market, what is the point of their going into the long-term rental market?
We have to think about what we are doing, today and in forthcoming legislation. I give the Minister due warning that a great many of us will want to shape that legislation, so that we can find a balance. We need to support the rights of tenants and landlords, and encourage a fair system that allows both sides proper representation in the law. That matters, because if we get this wrong, it will be incredibly difficult for us to support either the short-term letting market, which is so important to our visitor economy, or the long-term market, which is needed if we are to encourage digital nomads or others to live and work in different parts of the country.
There has been a lot of conversation around farming and diversification. As we are no longer in the common agricultural policy, our farmers have been asked, through the environmental land management scheme, to consider how they can diversify. However, time and again, they are hampered from changing the use of their properties. We must make it easier for them to do so. It is no good taking away their subsidies, and then changing the system and saying, “It is this difficult to apply for planning permission.” Time and again, farmers and rural businesses face huge costs from organisations such as Natural England, with the result that they cannot diversify.
If we want to improve housing stock; encourage landlords to let long-term rental properties; encourage primary residency building, as is envisaged in the neighbourhood plans; and encourage an ability to diversify in rural landscapes, we must act. If we get that right, we can achieve the perfect balance between short-term lets, long-term lets and affordable properties, because in the end, the issue all boils down to supply.
Duncan Baker (North Norfolk) (Con)
It is a pleasure to speak in this debate. I am thankful to my hon. Friend the Member for Torbay (Kevin Foster), who brought it forward. As everybody has said, this matter dominates our postbags in every constituency around the country; it has been incredibly important in North Norfolk ever since I was elected. It is pertinent for me, because I was born and raised in North Norfolk and I have seen what has happened over the last 10 or so years; the property market has been turbocharged.
We have all said nice things about our constituencies. Mine is coastal, rural, beautiful and idyllic, just like pretty much everybody else’s here. However, there are unique and very difficult issues for tourism hotpots, which all suffer from the same phenomenon. People probably do not know that North Norfolk has the second highest number of second homes and holiday lets outside of London and Westminster. We talk a lot about how the issue affects the Lake district, the Peak district and the south-west, but 9.8% of all homes in North Norfolk are second homes or holiday lets. That is nearly 5,500 out of our 55,000 homes. Of course, we have a huge leisure and tourism offering, as do other areas, but with that offering comes nearly 3,000 holiday lets. That number has been totally turbocharged since the pandemic.
To put those figures into context, in Wells-next-the-Sea, which is one of the primary areas that I represent—I am sure many colleagues have holidayed there—40% of all homes are now second homes or holiday lets. In the villages around my constituency that are often coined “Chelsea-on-sea”, such as Morston, Salthouse, and Blakeney, where every new build house now goes for £1 million, over 50% of the homes are holiday homes or holiday lets. Some 2,700 families and households are on the North Norfolk District Council housing list. That cannot go on.
I may be a Conservative, but sometimes the Government are right to intervene in the market to try to help people. I am pleased that when the Minister speaks, we will hear that the Government are doing something about this issue. We have to recognise what the Government have achieved in just the last few years. I am pleased to see that the planning system is being considered. That comes on top of the doubling of council tax for second homes that are not used. Those are sensible, proportionate and measured ways in which we can improve the situation.
We must remember that all our local economies are supported by tourism. In North Norfolk, it generates £529 million. However, that is absolutely no good if the local restaurant, hotel, care home or shop cannot employ anybody in the vicinity. Communities do not want to be ghost towns in the winter. We have tried different things. We tried placing local restrictions; for example, we had residents-only referendums in St Ives, which did nothing but turbocharge the market. They did not work appropriately. We have tried placing restrictions in house builders’ sale documents, to say that homes are primary residences. However, those documents quickly become not worth the paper they are written on, and stag and hen parties turn up to those estates. People retire to those places to live in comfort, only to have that taken away from them.
It is right that local authorities, which know the areas better than anybody else, be given the planning tools to help. When we double council tax on second homes, we should think about district councils. Mine receives only 8p in the pound to help the areas that receive that double taxation. Those local authorities should be able to take that money back. I know the Treasury does not like hypothecated revenue, but we should help those local authorities by giving them that money—it is worth £8.2 million in North Norfolk—to build more affordable homes to rent and to buy, so that they can help the communities affected. This is about a range of tools, not one, but the measures I have mentioned are proportionate and will help.
Cherilyn Mackrory (Truro and Falmouth) (Con)
I thank my hon. Friend the Member for Torbay (Kevin Foster) for bringing forward this important debate. I do not want to go over old ground when my colleagues have already been so articulate about the issues we have in Cornwall and other parts of the country. However, I want to address a couple of points, particularly on buildings.
I was elected in 2019, and covid hit three months later. I had my first village surgery in August 2020, and 15 families came within two hours. Every single one of them in St Agnes was being evicted because the property was being flipped from a long-term letting to a short-term holiday let. That problem had already been bubbling up, but it was made more acute by covid, people wanting to move to Cornwall, and people wanting to flip their properties to holiday lets. When I came back to this place, there was an accusation that Cornwall was not building enough, but that is not true.
I pay tribute to Councillor Linda Taylor, the leader of our council, and Olly Monk, the housing and planning lead. Cornwall Council, working with partners, is starting to produce more than 1,000 homes a year. More than 700 homes built in the last two years are affordable. That is more than Leeds and Manchester, so Cornwall is definitely doing its bit to build homes. Cornwall has also been in the top two authorities for building affordable homes in the last 10 years, and has been at the forefront of asking the Government to launch consultations on registering second homes and changing the planning rules around short-term holiday lets. That is because we have a Conservative council, six Conservative Cornish MPs, and a Conservative Government, who are all working together behind the scenes to make the changes to achieve the balance that my hon. Friend the Member for Totnes (Anthony Mangnall) mentioned.
Short-term holiday lets also have a knock-on effect on services in Cornwall. We have an influx of people in the summer. I have asked for fairer funding for our NHS and police. With the sharp rise in short-term holiday lets, issues become more acute, because we get more and more people coming in, beyond those who come to our hotels and B&Bs, and that puts extra pressure on our hospitals and police—a point the Minister might want to take back to the Department.
Covid brought out how fantastic our communities are in Cornwall. I often say to our parish councils and community leaders that if I could bottle that and send it to the rest of the country, I would. When covid hit, the vast majority of our communities knew where our elderly and vulnerable people lived and were able to help straight away. We are Conservatives, so we should want to do everything we can to conserve that. One of the villages just down the road from where I live is over 70% second homes already; we have to do what we can to halt that. We live in a pretty place. We want to look after our elderly and vulnerable people and ensure that young families can afford to live there, too.
I will not go on, because colleagues have articulated the point brilliantly, but I have one plea to my constituents and everybody in Cornwall: please feed into the Government’s consultation, which closes on 7 June. I make that plea to everybody: short-term holiday let owners, hoteliers, the police, the hospitals, everybody who is looking for staff in Cornwall, and residents. Only by getting a vast array of opinions and arguments in favour and against can the Government get this right. Working together, we will get this right, and get the finances for our communities.
Dame Caroline Dinenage (in the Chair)
Thank you, everybody, for keeping so beautifully to time. I will now call the Front-Bench spokespeople, starting with Joanna Cherry.
Joanna Cherry (Edinburgh South West) (SNP)
It is a pleasure to serve under your chairpersonship, Dame Caroline. I commend the hon. Member for Torbay (Kevin Foster) for securing this debate.
As a Member of Parliament representing an Edinburgh constituency, I am well aware of the impact that the explosion in short-term let properties has on local housing markets in tourist hotspots. The debate was prompted at least in part by the UK Government’s recently opened consultation on a registration scheme for short-term rental properties in England. I am pleased to say that the Scottish Government have been quicker to act on these issues. They have implemented legislation, and our scheme is now up and running in Scotland. That is but one example of a policy area where, despite limited powers of devolution, tangible measures to tackle the cost of living crisis and the cost of housing are being implemented in Scotland.
Joanna Cherry
I want to develop my point. Licensing and planning rules have already been introduced by the Scottish Government for the city of Edinburgh, and owners of short-term lets have until October to comply with the changes. Edinburgh became the first let control area in July 2022, and a smaller control area is being planned in the highlands. The First Minister also recently proposed allowing councils to double the council tax paid on empty and second homes.
The supply of housing and the impact on rents for local people has been well articulated during this debate. Housing matters are devolved to the Scottish Parliament, but as a Westminster MP, I often get requests from constituents who are struggling to afford rented property. It is not just in tourist cities such as Edinburgh that these problems are acute; rural Scotland also faces housing shortages as a result of the growth in the short-term rental sector. As in rural areas of England, that has an acute impact on the provision of local services, particularly health services; nurses and carers struggle to find accommodation in many of Scotland’s rural communities, and in many areas of the highlands and islands.
The shortage of affordable rental properties also impacts directly on the tourism sector, as many workers simply cannot find anywhere affordable to live. In the islands of Scotland, there are reported cases of many of those important tourism sector workers being forced to sofa surf. In some cases, they have been advised to wait until after 6 o’clock to try to book last-minute accommodation on platforms such as Airbnb—the very platforms that are preventing them from accessing housing in the first place.
Many communities are at risk of being hollowed out by an oversaturation of short-term lets, which not only drive up rent and squeeze out long-term renters by reducing the supply of housing, but cause problems for neighbours and put additional strain on council services. I know from my own casework that a problem that originally affected only Edinburgh’s medieval old town has spread across the entire city, and it is not just about soaring rents and the scarcity of properties for rent. Long-term residents face living with constantly changing groups of tourists, who put pressure on the building or street’s communal waste bins, hold regular and noisy parties, or simply check out early or very late for flights, banging their suitcases down common stairwells at all times of the day and night. In some buildings in the old town of Edinburgh, almost all the flats are now Airbnbs, while the last few remaining residents feel squeezed out and endure constant noise, so the provisions introduced by the Scottish Government and City of Edinburgh Council will be extremely important.
The removal of a large number of properties from long-term rent has an impact on the wider economy, and a city like Edinburgh cannot grow without homes for workers. Living, breathing communities are what make tourist destinations attractive. Four years ago, when the Scottish Government concluded their first consultation on short-term lets, CNN cited the city of Edinburgh, the Taj Mahal, Machu Picchu, Dubrovnik and Iceland as famous destinations that
“can no longer cope with their own popularity”.
That is why City of Edinburgh Council has produced a new tourism strategy, which notes that:
“One of Edinburgh’s most distinctive features is that established residential communities are to be found right across the city, including in the city centre.”
Our council strategy goes on to say:
“The quality of life for residents and the attractiveness of Edinburgh as a destination are inextricably linked. The one cannot suffer at the expends of the other.”
Anthony Mangnall
I am sorry to interrupt the hon. and learned Member’s speech. I congratulate her enormously on the proposals that have been put forward in Edinburgh; there is a great deal that we can learn across the country. I just wonder whether there are any forecasts out there of how these proposals are likely to affect the long-term letting market. I know it is a bit early, but it would be helpful to understand whether the measures being introduced in Edinburgh could be replicated elsewhere.
Joanna Cherry
I know that City of Edinburgh Council and the Scottish Government are monitoring what happens in Edinburgh, because we hope that the scheme will be rolled out across the country. I am sure that information will be available in due course. The scheme has also been welcomed by the chair of the Edinburgh Hotels Association, which represents 54 hotels covering nearly 9,000 bedrooms across the city. He said that
“the increase of short-term lets in sensitive urban and rural locations does nothing to enhance the visitor experience. A licensing scheme can help balance this, ensuring that our city and country continues to enjoy the benefits of tourism”.
As hon. Members have mentioned, licensing can also deal with safety issues.
The whole of the city of Edinburgh has now been designated as a let control area, and others are planned for the Scottish highlands. The Scottish Government will also go further by giving councils powers to ensure that tourism works for communities by introducing a transient visitor levy, which will give councils discretionary powers to apply a levy on visitors so that they can respond to local circumstances more effectively and develop, support or sustain the visitor economy.
A huge part of our current cost of living crisis across the United Kingdom is that people on low incomes—key workers, and also students, who are our future—face an acute housing crisis. I welcome this debate, and I look forward to the Minister’s response, but I urge the Conservative Government to follow the Scottish Government’s and put in place bold measures to try to protect ordinary households from profiteering in the housing market. The action needed to tackle the impact of soaring numbers of short-term holiday lets on the housing crisis is now overdue. I am proud to say that, certainly in this policy area, the Scottish Government and the City of Edinburgh Council have a very good story to tell.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It is a pleasure to serve with you in the Chair, Dame Caroline. I congratulate the hon. Member for Torbay (Kevin Foster) on securing this important debate and commend him for the focused and thoughtful remarks he made in opening it. I also thank all other hon. Members who have participated in the debate. In particular, I praise the contributions of my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) and the hon. Member for Westmorland and Lonsdale (Tim Farron). Both have long called for bold action in this area, and both brought home the need for urgency in taking the measures still required to tackle it.
It is not in dispute that holiday homes and self-catering apartments have an important role to play in catering to the needs of tourists, as well as those who require short-term accommodation for work or other purposes. All hon. Members who have spoken clearly recognise the contribution of short-term holiday lets, and the visitor economy more generally, to the prosperity of individual homeowners and local economies in their constituencies. When we respond to the issue, it is absolutely right, as the hon. Members for East Devon (Simon Jupp) and for Totnes (Anthony Mangnall) mentioned, that we should get the balance right.
As we have heard repeatedly throughout the debate, the issue is that the surge in the numbers of homes marketed for short-term holiday lets over recent years has generated a number of significant challenges for communities across the country. Those challenges range from the immediate impact on residents, neighbourhoods and local services of high visitor turnover, particularly when short-term lets are abused by the minority of antisocial or disruptive guests, to the longer-term negative impact on entire communities with respect to the affordability and availability of homes for local people—and, indeed, those who work in the visitor economy—to both buy and rent.
As noted several times in the debate, those challenges are obviously most acute in areas of the country, be they rural, coastal or urban, where the concentration of short-term holiday lets is extremely high. It is worth noting that they are also particularly evident in London, owing to the fact that the Cameron Government decided, by means of the Deregulation Act 2015, to loosen requirements on short-term letting in the capital, allowing properties to be let for a maximum of 90 days a year without requiring planning permission. The Government were warned at the time about the harmful consequences that would flow from the relevant provisions in that Act, not least given that few, if any, London boroughs have the means to monitor and enforce the 90-day limit, but those warnings went unheeded, and short-term let abuse is now rife in many parts of the capital as a result. I feel duty bound, as the only London MP in the debate, to mention that particular problem.
It has been abundantly clear for some time that the deregulated nature of the short-term letting sector is deeply problematic. There is a pressing need to overhaul the sector’s regulatory framework to account for the significant changes that have taken place over the past 10 to 15 years, but also, we would argue, a watertight case for giving local authorities that are struggling to cope with high concentrations of short-term holiday lets the powers they need to protect the sustainability and cohesion of their communities. It is true, as the hon. Member for Totnes mentioned, that measures have been enacted on the business rates loophole and neighbourhood plans to try to tackle the problem, but we argue that they are clearly insufficient, not least because we would not be debating the issue today if they went a long way to solving the problem.
Having opposed for years the very notion that robust regulatory intervention was required to address the negative impact of short-term holiday lets on communities and local housing markets, the Government were finally forced to act in June 2021.
Anthony Mangnall
The hon. Member has criticised the Government for introducing policies, but I wonder what Labour’s position is on what the correct level of short-term lets in communities is.
Matthew Pennycook
If the hon. Member gives me the opportunity, I will go on to make clear where we differ from the Government, in what they have and have not proposed.
As I was saying, when the Government finally acted in June 2021, they did so only in the most limited fashion, agreeing to have the Department for Culture, Media and Sport consult on a tourism accommodation registration scheme in England. After consistently resisting various attempts to amend the Levelling-up and Regeneration Bill in Committee, so that it might provide local communities with more effective means of redress, the Government were forced to go further late last year. The concession they made on Report, on 13 December, was to agree only in principle to introduce a discretionary registration scheme in England, and only by means of legislation that might come into force as late as autumn next year.
Subsequently urged to go further still by the Opposition—as well as, it must be said, many Government Members—Ministers have now committed, as we have heard, to consult on the introduction of a new planning use class for short-term lets. Let me be clear—here I address the point made by the hon. Member for Totnes—that the package currently on offer from the Government still falls short of the comprehensive suite of measures that we would like to see enacted at pace to tackle this problem. The Government remain opposed to, for example, the introduction of a discretionary licensing scheme of the kind we have proposed on numerous occasions, which we think would be the solution in many parts of the country dealing with particularly high concentrations.
None the less, we welcome the consultation on the new planning use class, just as we welcome the commitment to introduce a new discretionary registration scheme. However, as so often with this Government, where they propose to give with one hand, they plan to take away with the other. Because that new consultation, as the hon. Member mentioned at the outset, also invites views on introducing new permitted development rights that would make it easier to convert dwelling houses into short-term lets, with proposed article 4 direction protections applicable, according to the consultation, only in
“the smallest geographical area possible”.
I encourage hon. Members to go and see what investors are saying about that part of the consultation. They say they are happy with the consultation overall, because the inclusion of that provision makes it light touch, and will make it incredibly attractive and easy for investors to convert properties into short-term lets. I caution the Government about going down that route, not least because the consultation makes clear that what they propose in that expansion of permitted development rights would not be subject to any limitations or conditions, and would apply in national parks and areas of outstanding natural beauty. I want to put on record the Opposition’s serious concerns about the implications of expanding permitted development rights in that way and our intention to scrutinise extremely carefully any measures that the Government might ultimately decide to bring forward in this area.
The more fundamental issue is the frankly glacial pace of the Government’s overall response to the challenges posed to communities across the country by the surge in short-term holiday lets. For many English communities, particularly those with extremely high concentrations of such lets, it is not hyperbole to argue that those challenges are existential, entailing as they do the loss of a significant proportion of the permanent population, as a result of local people simply being unable to find affordable local homes in which to live, and diminished local services and amenities, whether that be local schools, transport links or local small businesses, for those who manage to hang on.
It is not good enough for Ministers to tell those communities that they may be able to establish a registration scheme to gather information about short-term lets at some point next year, if and when the Levelling-up and Regeneration Bill receives Royal Assent, or that they may be able to control the numbers of such properties by means of a new planning use class, at some point in the coming years, if appropriate regulations emerge from the current consultation. Those communities need a response commensurate with the scale of the challenge they face, and they need it urgently.
We urge the Government, not only to rethink the potential further expansion of permitted development rights, as set out in the consultation now under way, but to accelerate the introduction of the discretionary registration scheme, to which they are committed, to legislate for the introduction of a new planning use class for short-term lets without delay, and to give serious consideration to other measures, whether on taxation or licensing, that will almost certainly still be required, so that the communities we have been discussing today will finally have the prospect of securing the full suite of planning and non-planning tools that they need to appropriately regulate the numbers of short-term holiday lets in their areas and manage their day-to-day impact. That is what a Labour Government would do, and it is what we need this Government to do.
The Minister of State, Department for Levelling Up, Housing and Communities (Rachel Maclean)
It is a great pleasure to see you in the Chair, Dame Caroline, and I thank my hon. Friend the Member for Torbay (Kevin Foster) for introducing this vital debate. It is a credit to him that so many Members from across our wonderful United Kingdom are here to speak on the issues he has highlighted, and I will turn to all the contributions that colleagues have made before I conclude my remarks.
However, I want first to pay particular tribute to my hon. Friend, whose efforts on behalf of his constituents have recently been recognised in the local elections. It is no surprise to me to hear that there has been a win for the Conservatives in his local council area, no doubt thanks to his assiduous work on behalf of his constituents and his communities, and I commend him and his colleagues in Torbay for that incredible effort.
My hon. Friend’s speech has done an extremely good job of reflecting the concerns involved and the issues that matter to his community. He has highlighted the importance of homes for people to live in, which enable them to take jobs in the local economy, and his desire to prevent streets that should contain homes for families from turning into holiday parks. He has called for a balance to be struck, and I hope colleagues will see that my aim is to reflect that in my remarks—indeed, it is what all hon. Members have said—but we agree with him that we must tackle the issue of constrained housing supply.
My hon. Friend is right to challenge me on how quickly such measures could be enacted, and I will definitely turn to that in the body of my speech, but let me first say that I want to be clear that we recognise the value of tourism to our country.
I feel as though I went on a wonderful virtual holiday while colleagues were contributing to the debate, reflecting on many family holidays in different parts of the UK. I think I have been to almost every constituency represented in the Chamber. I have four children, and we had a limited holiday budget when the children were little, so we often had wonderful holidays in this country. I have been to the constituency of the hon. Member for Strangford (Jim Shannon) and had lovely walks there. The hon. Gentleman mentioned sharks. We have plenty of sharks here in Westminster, so I do not need to go far to see them. It was certainly very sunny when I went to the constituency of the hon. and learned Member for Edinburgh South West (Joanna Cherry), as it was in Norfolk, Cornwall, Devon and elsewhere.
Tourism is an economic, social and cultural asset that plays a vital role in supporting our institutions and attractions across the country. It is a major contributor to UK jobs and growth, employing 1.7 million people and contributing nearly £74 billion a year pre-pandemic. I am not going to repeat everything that colleagues have said, but we all understand why we need to introduce these reforms. That is why we are in the Chamber for the debate.
Every Member from every party has highlighted the issue of the hollowing out of communities, the impact of that on schools and other services, and the fact that the growth of short-term letting might in itself be having an impact on local businesses that serve the tourism industry, such as restaurants and cafés. That is why we are consulting on changes that will provide local areas, where there is a concentration of such usage, with the necessary tools to help them to strike the right balance between supporting tourism and providing housing for local communities.
Briefly, there are two separate strands to our proposals. The first is the introduction of a new use class for short-term lets and associated PDRs. The C5 short-term let use class will capture those properties that are not someone’s main or sole home, and which are used for the purpose of providing short-term lets. When the use class comes into force, subject to consultation, all dwelling houses will be reclassified. When they meet the definition, they will fall into the C5 use class. There is no planning process attached to that, which means there is no burden on existing short-term lets.
However, short-term lets are not an issue everywhere, which is why we are introducing national permitted development rights that will allow for the change of use from dwelling house to C5 short-term let and vice versa. That will return the position to the status quo ante. Therefore, many people who live in areas where there is no local issue will see no change. Where there is a local issue, the local authority may remove that right by making an article 4 direction. That addresses the point made from the Opposition Front Bench by the hon. Member for Greenwich and Woolwich (Matthew Pennycook). A planning application will then be required with respect to any future material change of use, allowing for local consideration of where additional short-term lets would or would not be acceptable. In that way, local areas would be able to retain more homes for local people to rent or buy. Many colleagues have been calling for this change, and we expect that they will want to make that article 4 direction and will have the supporting evidence to do so.
Our second proposal relates to where people let out their main or sole home. We know that many people do so and that that helps them to manage the rising costs of living and to benefit from the sharing economy. However, there is no defined limit on how many nights someone can let out their own home, which can lead to uncertainty. We are therefore proposing some changes that will provide homeowners with confidence on how many nights in a calendar year they can let out their home—whether that is 30, 60 or 90. If, in future, homeowners wanted to let out their own main or sole home for more than that specified number of nights, planning permission would be required where there is a material change of use.
As many colleagues have said, and I hope anyone listening will note, the consultation closes on 7 June. It is generating a fair amount of interest, and we welcome this timely engagement with hon. Members on this important issue. My hon. Friend the Member for Torbay has challenged the Government, as I fully expected he would do, on when changes can be enacted and brought forward. I reassure him that, subject to the consultation, measures can be brought forward through secondary legislation, but we need to consider fully all the issues raised, not only in this Chamber but elsewhere, in past debates and in the consultation. It is right that we consider all the issues carefully so as to avoid unintended consequences, as many colleagues have said.
Separately, the Government are also introducing a register of short-term lets through the Levelling-up and Regeneration Bill. That will provide a valuable tool for local authorities; it will be a stronger evidence base of short-term let activity in their area, which could help those local authorities better manage the supply of short-term lets. That could also improve consistency and help local authorities apply health and safety regulations across the guest sector. It also gives international visitors visible assurance that we have a high-quality and safe guest accommodation offer.
My colleagues in the Department for Culture, Media and Sport are consulting separately on how the register would work in practice. We are of course working very closely with that Department and others to ensure that officials are looking across the piece at different Government measures, to make sure they are proportionate and complementary.
Those are not the only changes we are making on short-term lets. We have legislated to require from April 2023 evidence of actual letting activity, in response to very sensible concerns from colleagues. The property must have been let for at least 70 days in the previous year before it can be assessed for business rates and therefore qualify for 100% relief. That ensures that more properties contribute to local services through business rates, council tax or income tax regime changes.
Through the new Renters (Reform) Bill, introduced by the Secretary of State to Parliament just last week, we are removing no-fault evictions and will ensure that landlords will not be able to evict tenants simply to turn the property into a holiday let.
Our ambition remains to deliver the housing that communities need. We delivered 232,000 additional homes—a 10% increase on the previous year. I will not take any lectures from the hon. Member for Greenwich and Woolwich on the Opposition Front Bench. I agreed with many of his comments, but on affordable housing, we delivered over 632 affordable houses. They oversaw the worst record of housebuilding since the second world war in their time in government. In Labour-run Wales, which they often point to, they built no council houses between 2014 and 2017, and only 12 in 2019. Let us look at what they actually do, rather than what they say.
Rachel Maclean
I cannot give way; I am sorry. I need to give colleagues a fair hearing.
I thank the hon. Member for Westmorland and Lonsdale (Tim Farron). I note his support for the points made by my hon. Friend the Member for Torbay and for the Renters (Reform) Bill. I thank my hon. Friend the Member for East Devon (Simon Jupp), who highlighted the importance of these measures being in the control of locally elected councils, which they will be. That is what the changes we will introduce will seek to deliver.
The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) challenged us, and said we were not doing enough. I completely disagree with that and reject it. As I have set out, we are acting. The changes to section 21 had their First Reading in Parliament just last week.
My hon. Friend the Member for St Ives (Derek Thomas) challenged me to work closely with other Departments, including the Treasury. We work very closely with the Treasury and also the Department for Energy Security and Net Zero, on some of the measures with energy performance certificates. He was right to raise that issue, and concerns have been raised with me.
As ever, I thank the hon. Member for Strangford. It is very important that we all work together across our United Kingdom, even though these issues are devolved, and that we learn lessons and make policy that affects everybody.
I thank my hon. Friend the Member for Totnes (Anthony Mangnall), who was right to highlight the considerable work going on across Government. I reassure him and any other colleagues with concerns about the Renters (Reform) Bill; we are working closely with him and others to ensure we shape the legislation, as we always do, by listening to different views. My hon. Friend the Member for North Norfolk (Duncan Baker) made a good point about district councils. He has spoken to me about that on many occasions, and we look forward to working with him to understand those issues, and how district councils as well as higher-tier authorities can reap the benefits of the rise in council tax for second homes. My hon. Friend the Member for Truro and Falmouth (Cherilyn Mackrory) gave a fantastic speech. She highlighted how acute the problem is in Cornwall, and how much it affects her constituents not only in St Agnes but elsewhere. I thank her in particular for championing what her local council, under Conservative control, is achieving.
The SNP spokesperson, the hon. and learned Member for Edinburgh South West, highlighted the fact that the planning system is an issue across the United Kingdom. She will know that there is close working at official level to understand the implications of policies and look at evidence. It is right that we do that. The Opposition spokesperson, the hon. Member for Greenwich and Woolwich, challenged me, but he said that he supports what we are doing on balance. I thank him for that, and, of course, we will continue to be scrutinised in these debates and elsewhere. I am grateful for the opportunity to set out what the Government are doing.
Rachel Maclean
I do not believe I have time to give way, because I must allow my hon. Friend the Member for Torbay time to wind up. Unless the Opposition spokesperson can do it in 20 seconds—that may work.
Matthew Pennycook
I take that as a challenge. The Minister mentioned affordable housing, which I did not mention. Is she concerned that the Government are failing on their derisory target for affordable homes in rural areas?
Rachel Maclean
We need much more time to debate that issue, but I reject the hon. Gentleman’s contention. I suggest that he looks to his own party’s record in office in Wales, as I have already said. I thank my hon. Friend the Member for Torbay for securing today’s debate.
Kevin Foster
It has been a very worthwhile and enjoyable debate, with colleagues from across Devon and Cornwall making points. Cornish colleagues may not know the right way to do a scone, but they do know the right way to argue in this debate. It would be remiss of me to take all the credit for the recent local election result, given that I work very closely with my hon. Friend the Member for Totnes (Anthony Mangnall), part of whose patch covers the Torbay unitary authority area where we were pleased to say goodbye to some independents who were not very independent.
Members have rightly highlighted the challenges around short-term lets and the impact the issue is having on communities. While I hear the Minister say that we do not want unintended consequences, there is already a model north of the border that can be looked at, as highlighted by the hon. and learned Member for Edinburgh South West (Joanna Cherry). That allows us to see what can happen and what the early and emerging issues are with implementation. There is something already in operation within the United Kingdom that I urge the Government to look closely at, which gives some precedent to how a system would operate across England if applied following the consultation.
It has been a welcome debate, but there is an urgent need to take action. My call to the Government is that, while I appreciate that things need to be considered, when I was a Minister I learned how due consideration can become a slightly too lengthy process. It is something that needs to be thought through when it is implemented, but let us ensure that we are thinking clearly about how the length of time that this takes will have an impact. We must avoid a closing down sale effect if we do not get on with implementing what has been proposed. I am grateful to Members for their contributions, and for their support for the arguments made.
Question put and agreed to.
Resolved,
That this House has considered short-term holiday lets and the planning system.