Second Homes and Holiday Lets: Rural Communities

Rachael Maskell Excerpts

Thursday 6th January 2022 Westminster Hall

[Tim Farron]

I thank the hon. Gentleman very much for his helpful contribution, and for his ongoing concern and interest in this issue, which is very laudable indeed. In one sense, this issue is not complex at all. If a person is forced out of their community, it is not slightly complex; it is just bloomin’ tragic. Yes, there is a planning Bill, and I look forward to that. I might feel all sorts of dread about that Bill, but it is an opportunity to do something. However, every single day is an opportunity to do something. The opportunity was two years ago, a year ago, last week and the week before, and the Government do nothing.

The simple reality is that it is not that complex to do things that will shift the dial and save the dales and other rural communities that are being undermined in the way they are. That is what so frustrating to us: there are people from all parties in this Chamber today, and there are other people who would be here on a normal Thursday if it were not this time of year and if there were any votes today. The reality is that we know there is a problem, and we see no action from the Government. Every day that goes by is another day wasted. It is not complex—it is just tragic.

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

I am grateful to the hon. Gentleman for calling the debate and I congratulate him on his speech. Urban areas that are holiday destinations—such as York, which has more than 8 million visitors a year—are also plagued by the issue, which is about not only Airbnbs and holiday lets but second homes, not least because people have now discovered new ways of working. Is that not another factor to add to the equation when we look at not only who has the ownership, but what is being developed?

[Tim Farron]

The hon. Lady makes a great point and I am grateful for her intervention. It is not just a rural issue, although it may predominantly be rural. York is clearly a good example of somewhere that suffers in a different way. I will come to the issue of holiday lets and some of the answers in a moment. It will rob communities of their very life if we do not intervene. I am not someone who is anti-market—I am anti-broken market, and this is a broken market. This is our opportunity to do something about it.

Excessive second home ownership is a colossal problem in our communities. The purpose of this debate is to shake the Government out of their demonstrable and inexcusable inaction and to take the action required to save our communities.

The crisis has become a catastrophe, and it is not just about second homes. Holiday lets are an important part of our tourism economy. In the Lake district, we argue and believe that we are the most visited part of Britain outside London. Our tourism economy is worth more than £3 billion a year and employs 60,000 people—comfortably Cumbria’s biggest employer. It is a vibrant industry and, by its very nature, a joyful one; I am proud to be a voice for Cumbria tourism in this place. Those 60,000 people working in hospitality and tourism need to live somewhere. Some 80% of the entire working-age population of the Lake district already works in hospitality and tourism. We need to increase the number of working-age people who can afford to live and raise a family in our communities, yet the absolute opposite is happening at a rate of knots.

During the pandemic, in South Lakeland alone—just one district that makes up part of the Lake district—there was a 32% rise in one year in the number of holiday lets. I assure the Minister that those were not new builds; they were not magicked out of thin air. Those new holiday lets emerged in 2021 following the lifting of the covid eviction ban. That is not to blame the ban; it was a good idea, and it had to come to an end at some point. My point is that that rise was over a tiny period of time: less than 12 months, in reality. The fact is that this time last year those new holiday lets were someone’s home.

In Sedbergh, Kirkby Lonsdale, Kendal, Windermere, Staveley, Ambleside, Coniston, Grasmere, Grange and throughout Cumbria, I have met people who have been evicted from their homes under a section 21 eviction order—which, incidentally, this Government promised to ban in their last manifesto.

Among the hundreds evicted, I think of the couple with two small children in Ambleside, who struggled to pay £800 a month for their flat above a shop in town; they were evicted last spring only to find the home they had lived in for years on Airbnb for £1,200 a week. I think of the mum near Grange, whose teenage son had lived in their rented home his whole life; they were evicted only to see their property on Airbnb a few days later for over £1,000 a week. I think of the tradesman from Sedbergh, who had served the community for 15 years; a few days after he was evicted, his former home was also on Airbnb for £1,000 a week. There are hundreds more individuals and families in the same situation right across rural Cumbria.

--- Later in debate ---

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

I thank the hon. Member for Westmorland and Lonsdale (Tim Farron) for opening the debate so well, as we see a surge of second homes and holiday lets. We all know that our constituents need local homes for local people. They are being priced out of their communities and the wrong houses are being built, all at a cost to the local economy. This is about cost, tenure, and impact.

York is no different from rural areas; it is not about location but housing tenure and use, not least for a holiday destination. York has residential streets full of holiday lets, fragmenting communities in areas where second homes have a prevalence. We have new developments that are increasingly attractive to investors but unaffordable for local people. That includes the 2,500-unit York Central development, which even Homes England recognises could be dominated by second homes and holiday lets—it is now being dubbed “Airbnb central”. The wrong kind of housing is being developed; the site should be about public land being used for public good.

I do not chastise the Government for their focus on housing numbers, but in York, we need growth for our local people, and that focus is propping up second homes and the lettings market, and causing the housing market to overheat at the expense of local families being pushed further away from our city. The solution is local homes for local people, whether they already live in York or are moving to serve our local economy and public services.

Let me address costs. York receives more than 8 million visitors a year. The holiday let business is booming, not least as covid-safe staycations have been such a feature of the pandemic. York’s pressure-cooker housing market saw an increase of 14%—£36,000—in the average property price in the year up to August. First-time buyers spend 23% more on housing than they did five years ago. York’s affordability ratio is 8.3 and rising sharply. Family homes are being snapped up as holiday lets or second homes, and it is more lucrative to convert student lets to holiday lets, so we now have a problem with student accommodation. York’s superb connectivity and new ways of working mean that the opportunity to own a second home in York has become even more attractive to weekly commuters.

On tenure, developers are building units for investors, not to meet local need. They are perfect for short-term breaks but hopeless for local families, even though family homes constitute 80% of those needed. That is why the numbers game just does not work and the planning system does not deliver. It is a false economy: housing units are getting ticked off but housing need is not being addressed. It is a developer’s dream, as they can name their price, but a local person’s nightmare, as they are pushed away from our city.

On the impact, we cannot recruit those with the vital skills to staff our NHS or social care. We cannot staff our local economy, particularly in retail and hospitality, as people can no longer afford to live in York, and that problem has reached crisis point in some professions. The gentrification of our post-industrial city is coming at a heavy cost, not least as local families are now being driven away by the net loss of council housing and a housing waiting list that has tripled in my short time in Parliament. The unaffordable rents and market housing costs are forcing people to live and work elsewhere. Too many people are now at the mercy of unscrupulous private landlords or in overcrowded social housing. It is breaking our city. Local homes for local people is imperative.

I will make five suggestions. First, we need proper local data, including a register of housing lets and a register of second homes.

Secondly, we need to fix local taxation. Business rates do not work here, as we all know, so on top of council tax, a council tax levy should be paid by people who have the privilege of owning a second property for holiday lets. After all, people renting still use local services and need their bins collecting.

Thirdly, on planning, we need to build local homes for local people. The planning system does not currently accommodate that, and the obligations and incentives have a perverse impact. A residence test is required, and although I would welcome such a measure, it is about more than that. We need to address the problem not just at the point of sale, but when the land is being developed, and consider the obligations placed on developers. We need to review the local planning process—I appreciate that we have not had a local plan since 1954, which is escalating the problem—and I trust that the Minister will deliver that for us this year. He needs to bang heads together at our local authority to deliver that, because we absolutely need to look at the planning system in today’s context.

Fourthly, on financial incentives, scrapping the mortgage tax relief on holiday lets is absolutely essential, as is looking at how stamp duty can be even better used as a disincentive for second home ownership. When disposing of public land, instead of chasing one-off land receipts, investment in the long-term interests of the community and the socioeconomic outcomes should be the prime focus.

Fifthly, we should also limit the time for which holiday homes can be let, as has been done in London and Europe. That will curb the behaviour of some of second home owners and ensure that those homes can go to local communities.

We need the principle of local homes for local people to govern every housing decision so that we can once again have a vibrant community.