Housing in Tourist Destinations

Charles Walker Excerpts

Tuesday 28th November 2023 Westminster Hall

[Several hon. Members rose—]

[Sir Charles Walker (in the Chair)]

Order. I will give you all about six minutes, though we may have to reduce that. I call Samantha Dixon.

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[Rachael Maskell (York Central) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Sir Charles, and I congratulate the hon. Member for St Austell and Newquay (Steve Double) on securing this debate. Also, I welcome the new Minister, who is the 16th Housing Minister of this Government; the fact that there is such churn in the Department may well be part of the reason why we are struggling so much.

There is a danger that this debate could descend into the sketch about the four Yorkshiremen, as we all talk about the challenges we face. Nevertheless, I will speak as a York woman—at the centre of that—and say a little about York. We have a thriving tourism industry in our city and we really value it. Last year, 8.9 million visitors came to York. Tourism creates 17,000 jobs in the city and is a vital part of our economy, generating £1.7 billion. The city centre generates £1.2 billion. We know how important tourism is to our post-industrial city; in the last 40 years or so, it has really played an important role in our economy.

As everyone has said, though, tourism has its serious consequences. For York, the situation is descending, as many colleagues have said of other areas, into a dire housing crisis. There are consequences from having significant levels of tourism. We can look, first, at house prices in York, where demand outstrips supply. We know that has a real impact on affordability, the ratio for which is 10.9 in York. Last year, the cost of housing in the city went up 23%, pricing people out of local housing. York has the fourth highest rent in the country behind Oxford, Brighton and London.

Some people cannot get into social housing because we simply do not have the supply. If they have to go into the private rented sector, in the BRMA—the broad rental market area—people get just £650 when they are having to pay £1,045 for a two-bedroom property. Will the Minister ensure that there is a deep dive into what is happening with the BMRA? The price is set around such a broad region, and the lower prices in North Yorkshire mean that York is more of an outlier than the other high-priced areas because of the differential in prices. As a result, people cannot go into the private rented sector, so sadly have to go into hostel accommodation or on to the streets. That has to change.

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

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

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

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

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

[Sir Charles Walker (in the Chair)]

A beautifully timed speech, might I say.

[Selaine Saxby (North Devon) (Con)]

It is a pleasure to serve under your chairmanship, Sir Charles. I thank my hon. Friend the Member for St Austell and Newquay (Steve Double) for securing this important debate. As always, I agree entirely with him; our constituencies share so many characteristics—although I do dispute where the best tourist destination is.

North Devon has wonderful beaches, the UK’s only surf reserve, remote moorlands and beautiful countryside. It is unsurprising that there is high demand to live in what the Secretary of State for Levelling Up, Housing and Communities called a “very attractive” part of the country. The trend accelerated during and after the pandemic, particularly with the stamp duty incentives that enabled many to purchase additional homes by the coast. We are incredibly proud of our tourism sector, which contributes significantly to our local economy. The hospitality sector contributes £229 million and helps to employ more than 8,000 residents in North Devon.

That is all positive news for our economy, but it takes a toll on our housing market. When I talk to business owners in North Devon, they tell me that one of their biggest challenges is staffing, and that the main reason why is the lack of affordable housing that is available for local people to live in all year round. That sentiment is relayed to me across all sectors. Teachers cannot afford to live in the same areas as the schools they teach in, and with property prices more than 10 times higher than average incomes, health and social care workers in particular have little hope of being able to buy or rent a place to live. Even high-earning professions such as dentistry are affected, as demonstrated by the company mydentist being unable to recruit despite offering a £20,000 golden handshake to entice dentists to move into the area.

Housing is the root cause of so many problems in North Devon. I will not say it is a magic wand, but if we freed up and delivered new housing supply, it would allow people to live, work and, most importantly, play a part in the community that they grew up in.

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

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

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

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

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

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

[Sir Charles Walker (in the Chair)]

Sorry, but I have to drop the time limit to five minutes. I call Tim Farron.

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[Sir Charles Walker (in the Chair)]

I call Derek Thomas—sorry, Jim; I thought you were sitting down.

[Jim Shannon]

It is clear that the Government have taken steps to address these issues in England, but it would be great to know that communication is under way to assess the situation further afield in the devolved nations and to share ideas, strategies and planning laws, so that we take a united approach in ensuring local housing provision for people in all constituencies of this great United Kingdom of Great Britain and Northern Ireland. We are always better together.

[Sir Charles Walker (in the Chair)]

Sorry for my premature calling of Derek Thomas; I saw some movement.

[Derek Thomas (St Ives) (Con)]

I appreciate the warning, Sir Charles; I would never want to interrupt the flow of the hon. Member for Strangford (Jim Shannon). I commend my hon. Friend the Member for St Austell and Newquay (Steve Double) for securing the debate. It is great to have him back on the Back Benches, continuing his battles for West Cornwall and the Isles of Scilly, Devon and the rest of the south-west.

There is a reason why the areas that we live in and represent become tourist destinations: they are beautiful. Most—I think over 80%—of my constituency is designated in some way or another. People flock down to it. I know that it is the most beautiful part of the country, because I get messages from colleagues all year round telling me that they are down in my patch or have just been there.

It is inevitable, because of the places we represent, that tourists will turn up, and they are welcome. Jobs are created because of the services they need and tourists support rural businesses. Many of our rural shops would probably struggle if tourists did not support them when they visit. Tourists’ contribution to the economy is important, and there is the effect on construction. We have also seen, particularly since covid, that tourists become residents. They purchase property because they enjoy what they see and discover that they can work from home, so they come and live in our beautiful part of the world. Again, that brings jobs and investment and supports rural businesses and construction.

This is not a new thing. I did my apprenticeship 35 years ago as a Cornish mason. I am probably the only one in this place who is a Cornish mason—I am not a freemason; I used to charge. We used to work with slate, stone and obviously the wet trades. Most of my winters were spent working to support the tourist industry or working for people who had purchased properties and were planning to move down. This issue is not new, but it does carry consequences, which we all know of and have heard about this afternoon. It is true that successive Governments have largely allowed free market principles to determine the destiny of these communities. I am glad that this Government are recognising that the situation cannot carry on and intervention is needed.

As we heard, our communities have been hollowed out. Pubs, schools, post offices and shops have closed. The lights are turned off in the winter; that is common in some villages in the area I represent. More importantly and more concerningly, older, vulnerable people become even more isolated and alone—that is really tragic, and if Members are interested in that, I have a debate on the subject next week. The Government have introduced various ways to deals with this issue, including Help to Buy, stamp duty premiums and levelling up and regeneration, which we have heard about a lot today.

The truth is that a secure home is one of the most important things we can deliver for our constituents. The stress levels of families, as well as their health, their children’s education and family wellbeing are all impacted by whether they have a secure and affordable home. That is the only reason why we are all here this afternoon. Ensuring the right balance of local homes and holiday accommodation brings with it many benefits, as we work to strengthen local communities and create places to live, work and raise a family.

Those of us representing tourist areas face a challenge, but that challenge offers huge opportunities to restore communities who feel left behind. Ramping up house building in the right places to meet local need is a really important way of addressing skills shortages and supporting pubs, schools, post offices and so on. Perhaps the Minister would like to have a word with planning departments, which seem to stand in the way of our seeing houses built in parts of the land that are ideal for supporting rural communities. Maybe he could encourage them to help rather than hinder the building of the right homes in the right places to support those communities.

Building homes ramps up skills and enables young people to stay in the local area and be part of their community, having a secure, well-paid job. Historic England has just released an important study about where the skills shortages are across every constituency, focusing particularly on existing homes and how we resolve those shortages. We must also fix rural service funding. If we fix the funding of rural areas, recognising that tourism demands certain services that other places perhaps do not need, putting pressure on the NHS, policing and so on, we can begin to build good, strong communities.

[Sir Charles Walker (in the Chair)]

I call the Scottish National party spokesperson. You have no more than 10 minutes, please.

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[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair, Sir Charles. I start by congratulating the hon. Member for St Austell and Newquay (Steve Double) on securing the debate. I also welcome the Housing Minister to his role. Reference has been made to the rapidity of changes in the identity of the Housing Minister. One wonders whether, with such a rapid turnover in the occupants of the Housing Department, it should be sponsored by Airbnb.

The hon. Member for St Austell and Newquay set out very well the challenges facing his constituency: the pressure on the housing market, the issues with recruitment, and the stark disparity between the average house price and the average wage in Cornwall. He was right to welcome the increase in local housing allowance and to mention the pressure placed on parish councils—all local authorities will recognise that.

My hon. Friend the Member for City of Chester (Samantha Dixon) showed what an excellent Member of Parliament she is and what an excellent council leader she was in bringing back council housing. She now has a third role as an excellent advocate for the Chester tourist board, because she spoke glowingly about the wonderful attractions in Chester. However, she really identified the nub of the issue, which is how right to buy has turned into private rented sector lets, which have turned into short-term lets. That is really at the root of the problems we are discussing. As an MP with a neighbouring constituency, I can see that the pressures Chester is experiencing are having an impact on the wider housing market.

The hon. Member for East Devon (Simon Jupp) spoke about the balance that needs to be struck between the competing demands in his area. That is absolutely the right way to look at this issue.

It was a pleasure to hear from my hon. Friend the Member for York Central (Rachael Maskell). She spoke in stark terms about the pressures in York, with a 23% increase in house prices and the fourth highest rents in the country. However, she also talked about a £6 billion tax deficit—money that is not reaching the Exchequer—and I am sure my colleagues in the shadow Treasury team will be looking at that with interest. She also made the important point that this is a cross-departmental issue and that a taskforce approach should be considered. I will certainly take that point back to others in the team.

Cross-departmental approaches were also raised by the hon. Member for North Devon (Selaine Saxby), so it is absolutely clear that there is more than one tool in the arsenal that we can use. She also mentioned the pressures this issue puts on education and dentistry, and I think we all recognise the pressures that those parts of the public sector face.

The hon. Member for Westmorland and Lonsdale (Tim Farron) talked about average house prices in his constituency being 12 times average incomes. I think we can all see why it is absolutely impossible for young people, in particular, to get on the housing ladder when they face these issues. The hon. Member was also right to raise the impact these issues have on recruitment in the hospitality and care sectors.

The hon. Members for Truro and Falmouth (Cherilyn Mackrory), for Strangford (Jim Shannon) and for St Ives (Derek Thomas) also all spoke with great passion and sincerity about the issues this subject brings up. To summarise the crux of those issues, it is clear that the housing problems in tourist hotspots have spiralled over the last decade and that the Government have not got a handle on the situation. As a result, local people are facing deep problems in accessing affordable housing.

Those who live year round in some of the most beautiful parts of the country are being squeezed out by the owners of second homes and the proliferation of short-term lets. People who have grown up in an area, who work there and who are the bedrock of the community now feel secondary to those who spend just a portion of their time there. I think we can all see how that direction of travel has hollowed out communities, and the consequences that can flow from that.

Having said that, as other Members have said, there is clearly a balance to be struck—one I think we all appreciate. Tourism is crucial to local economies, and indeed to regional and national economies, and many local communities rely on an influx of visitors to keep their economies going. In some places, tourism is the No.1 income generator, and we cannot ignore that. The availability of accommodation is also an important element in attracting people to visit a particular destination.

However, I reiterate that a balance has to be struck. For these destinations to thrive, there needs to be a community that underpins the hospitality at attractions; otherwise, who will be there to run the services that both visitors and locals rely on? Unfortunately, I think that that balance has got out of kilter in recent years, and the consequences that flow from that have been set out today.

Demand for housing has spiralled in many tourist destinations across the country. It was reported that, in the south-west alone, 3,000 new holiday and second homes were listed during the pandemic, while the number of homes listed for normal letting halved and rents increased significantly. In Wales during that period, there was a 5% increase in the number of holiday lets, with average rents rising from £155 to £181 a week. As a consequence, house prices in those areas have spiked.

The ONS reported in September 2021 that house prices were rising at three times the national rate in some of these areas—places such as Conwy, north Devon and Richmondshire have experienced increases of more than 20%, continuing trends that had begun in the pandemic. A report published today by the CPRE shows that demand for short-term lettings grew by 661% in Cornwall in the five years to September 2021, and by 1,231% in South Lakeland between 2016 and 2020. Nationally, the number of short-term lets has increased by more than 1,000% since 2015. This is not just one part of the country; it is north, south, east and west—every place that has significant tourism activity is seeing the same. For many people in many parts of the country, the cost of purchasing a home is already out of reach; in these tourist areas, that dream is even more unobtainable for too many people.

This issue stretches far beyond the challenge of actual home ownership. In Cornwall, for example, 15,000 families are on waiting lists for social housing, which, coincidentally, is the number of properties being marketed as holiday lets. In South Lakeland, roughly half the families in need of social housing could be accommodated in the properties that are made exclusively available for holiday lets. In Cumbria more widely, the 4% decline in privately rented properties has coincided with a 14% increase in social housing waiting lists since 2016. In Devon, it is clear that short-term lets are making problems worse, with 4,000 homes taken out of the private rented sector, but 11,000 added to the short-term lets sector since 2016. Those damning statistics lay bare the impact of what happens when the balance is out of kilter. Does the Minister accept that there is a clear link between the number of private rented properties and short-term lets?

It is beyond doubt that the deregulated nature of the short-term letting sector is deeply problematic. There needs to be an overhaul of the regulatory framework. We would also argue that there is now a watertight case for giving local authorities that are struggling to cope with this issue the necessary powers to protect the sustainability and cohesion of their communities.

Reforms have been attempted on a small scale, but nothing substantial has been done to get to grips with the problem. For example, Members have talked about the consultation conducted and completed in June, and I am sure all Members will want to hear from the Minister about when it will be published. But this piecemeal, foot-dragging approach is patently not enough to tackle the deep problems faced in our communities. The Government are still opposed to, for example, the introduction of a discretionary licensing scheme of the kind the Opposition have proposed on numerous occasions. We believe that such a scheme would be part of the solution to tackling this issue.

We welcome the consultation on the new planning use class, just as we welcome the commitment to introduce a new discretionary registration scheme. However, there is a sting in the tail—giving with one hand but taking away with the other—because the new consultation also invites views on introducing new permitted development rights that would in fact make it easier to convert dwelling houses into short-term lets. Perhaps the Minister can explain the rationale for including that in the consultation and how it will help with the problems we have been discussing. I encourage hon. Members to see what investors are saying about that part of the consultation. They are happy with the consultation overall because it is light-touch and it will make it incredibly attractive and easy for them to continue to convert properties into short-term lets.

The time has gone to recognise that this is an issue; the time has gone for sticking-plaster solutions. Communities urgently require a response that is up to the scale of the problem they face. We urge the Government to accelerate the introduction of the discretionary registration scheme and to legislate for the introduction of a new planning use class for short-term lets without delay. Nothing less than a full array of planning and non-planning tools is needed to appropriately regulate the number of short-term holiday lets. If this Government will not get on with it, they should step aside and leave it to a Government that will.

[Sir Charles Walker (in the Chair)]

Minister Rowley, could you leave a minute at the end for Steve Double to wind up, please?