Second Homes and Holiday Lets: Rural Communities

Patricia Gibson Excerpts

Thursday 6th January 2022 Westminster Hall

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I am delighted to participate in the debate, and I extend my thanks to the hon. Member for Westmorland and Lonsdale (Tim Farron) for bringing it forward.

An over-supply of second homes and holiday lets has a detrimental effect on our rural and island economies and ultimately leads to depopulation, as we have heard. Too many of those living in rural and island communities find that their working-age sons and daughters simply cannot afford to stay in the communities in which they grew up and raise children, because house prices have been driven up by second home owners and holiday let operators, pricing them out of their own communities.

The reality is that too many properties in our rural and island communities lie empty for considerable periods throughout the year. That is why the SNP Scottish Government are devolving powers to local councils to allow them to regulate second homes and holiday lets where people buy second homes in popular rural or island communities where housing availability is necessarily low. Different local authorities will tailor this regulation to suit their particular circumstances, and that is how it should be.

In 2016 the people of Cornwall had a referendum supporting a ban on second homes being purchased, because it priced people out of the market. In St Ives, the local council can take action if owners of new homes do not live in them as their principal residence. I understand that the previous Communities Secretary in the UK was looking at giving councils in England the power to ban the purchase of second homes if they are deemed to be damaging to the local community. Perhaps the Minister will update us on those plans.

In Scotland we are taking action. It is expected that new housing projects in parts of Scotland will receive planning permission only if they are reserved for full-time residents. We have an estimated 25,000 second homes, which leaves many local people struggling to get a foot on the housing ladder in areas where there is particular pressure—in popular locations such as the isle of Skye, the Western Isles, the isle of Bute and, of course, in my own constituency, on the isle of Arran. Twenty-five of Scotland’s 32 local authorities have already removed the 10% council tax discount on second homes. In addition, second home buyers have to pay a dwelling supplement of 4% on top of the land and buildings transaction tax on the purchase price of the property.

More power is also being delivered to local councils to manage the number of second homes in their area, and the Scottish Government will work with Community Land Scotland to ensure the right land is available to deliver more housing in our rural areas. We understand the need for more island and rural housing to ensure the long-term sustainability of those communities. Some 110,000 affordable homes will be delivered in Scotland by 2032, of which at least 70% will be available for social rent, and 10% will be in our remote, rural and island communities.

A remote, rural and islands housing action plan will be developed to meet the housing needs of those areas and to help retain and attract people to those communities, backed by a remote and rural island housing fund of at least £45 million, as part of the Scottish Government’s overall housing supply programme funding in the current parliamentary session. The goal is to try to ease some of the housing pressure that has built up over time and which needs to be addressed.

The challenge of depopulation is serious and that is why the Scottish Government will establish an islands bond. We will offer 100 bonds of up to £50,000 to young people and families to stay in or move to islands currently threatened by depopulation, supporting people to buy houses, start businesses and make their lives in these communities. We can celebrate the fact that on the isle of Arran in my constituency, for example, 34 new houses are being built on Brathwic Terrace in Brodick, with Scottish Government funding of £70,000 per house—a total investment of £2.38 million. Almost all those homes will be allocated to Arran residents, and a number of other developments are in the pipeline.

Of some concern is the fact that of the current 3,099 homes on Arran, 726 are second and empty homes, which constitute 23.7% of the island’s entire housing stock. The impact is that although the average house price in North Ayrshire is £136,000, the average house price on Arran is more than double the average of the rest of the local authority area, at £272,000.

As we have heard, that matters because we need a workforce on our islands and in our rural areas. We need teachers and cleaners for our schools; we need people to work in the hospitality sector; we need people to work in the shops, and to deliver care to our older people. Those workers need to be able to access affordable housing. That is so important for the sustainability of our communities, but at the moment, it is challenging.

As well as second homes, we have seen an explosion of the Airbnb market. In some parts of the UK, those properties have become so prevalent that there is now one listed for every four properties. The impact on the supply of much-needed homes in some of our rural and island communities is significant, but the challenges posed by Airbnb properties are not restricted to those communities. In fact, The Guardian identified Airbnb hotspots where the ratio of active listings to homes was more than 20 times higher than the average across England, Scotland and Wales. Indeed, the highest incidence of Airbnbs was found in Edinburgh Old Town, where there were 29 active listings for every 100 properties, followed closely by the north-west of Skye, which had the second highest concentration of 25 active listings per 100 properties. The impact of that type of let is that they drive up rental costs for everyone, making housing less affordable and having a serious impact on available housing stock.

The Liberal Democrat and Labour council in the Highlands has concluded that changing a dwelling to a short-term let should require planning permission, so that locals have a right to comment. That would help to weed out poor operators to the benefit of everyone. Constructive changes that we all want to see are going through the Scottish Parliament, including tackling overprovision, simplifying publicity notifications, stronger guidance on fees, and a focused use of inspections. The licensing orders going through the Scottish Parliament will help improve those matters.

No one is saying that there is no place for short-term holiday lets in our communities, whether rural, island or urban. They absolutely have a place in our island communities and in other urban and rural areas where people want to spend their holidays. When people do so, they are made most welcome. However, there has to be a balance in the market; as we can see, that balance is currently not there in some cases. That is why devolving powers to local councils to allow them to regulate local provision is an important and proportionate step.

I am very pleased that we have had this debate on this important matter today. Given that some of the challenges are replicated across the UK, I hope we can all share good practice to tackle the issue. I look forward to hearing the Minister’s response on what has already been done in Scotland and Wales and on whether he has any further ideas on what can be done. I hope he can also update us on the previous Secretary of State’s comments about tackling the issue.