Housing in Tourist Destinations

Justin Madders Excerpts

Tuesday 28th November 2023 Westminster Hall

[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?