Housing in Tourist Destinations

Simon Jupp Excerpts

Tuesday 28th November 2023 Westminster Hall

[Simon Jupp (East Devon) (Con)]

It is a pleasure to serve under your chairship, Sir Charles. I thank my hon. Friend the Member for St Austell and Newquay (Steve Double) for securing this debate on housing provision in tourist destinations.

Today’s debate is timely. We must ask ourselves: do we have the right balance? I think most people in this room would understand the answer. Do we have the right balance between local people, who want to get on the housing ladder, and property owners who are looking to buy a second or even third home? Do we have the right balance between having enough visitor accommodation options in popular areas and ensuring that local workers have somewhere to live? Finally, do we have the right balance on regulation? Are the Government’s proposals going to make a real difference and make more homes available in tourist destinations? Or will we still be debating this issue in one, two, three or 10 years’ time? We cannot afford to be doing that.

To be clear, I absolutely want to see a thriving tourism industry in my corner of Devon. I am proud to represent East Devon; my home county is a desirable place to live. Many people visit and immediately fall in love with the place. They may choose to come back year after year, staying in a variety of accommodation options, such as bed and breakfasts, seaside hotels and town centre short-term lets. Others visit and choose to lay down their roots there, not least for retirement.

One thing is for sure: visitors can always be sure of a warm Devon welcome. I head up the all-party parliamentary group for hospitality and tourism, and I know from first-hand experience that the industry has put on a brave face this year to continue to provide outstanding service and a warm welcome to visitors. That is why it was very welcome to hear that the Chancellor’s autumn statement announced an extension of 75% business rates relief until 2025.

Devon and Cornwall are dependent on the summer months for tourism income, and the business rates relief extension is very good news after a summer in which visitor numbers were down by a fifth. The seasonality of our tourism has knock-on effects on the local housing market. We are all too familiar with parts of Devon and Cornwall resembling ghost towns in the middle of winter. It is a really sad sight to see, when strolling down the seafront, second homes and summer holiday lets lying empty.

In 2019, 14% of annual visitor spend was in August, with 5% of spending occurring in January. Data from Cornwall Council shows that in some parts of that county 40% of properties are used as second homes. Without question, seasonality and second-home ownership combine into a noticeable problem in the region. Although I fully respect someone’s right to purchase a second home, including those used for short-term holiday lets, it is having a seismic impact on our local housing stock. Homes for local people to long-term rent and buy have simply become unaffordable in some areas. An easy way to assess the problem is to compare the average house price with the average salary of residents. In my constituency, East Devon, that ratio is 12.7; in Tiverton and Honiton, it is 10.6; in North Devon, it is 12.2; and in Totnes, it is 14.3. Bear in mind that the average ratio in England and Wales is 8.9.

What can the Government do to get the balance right on policy and regulation so that people can get on the housing ladder in tourist destinations? First, I welcome the Government closing tax loopholes for short-term holiday lets. It was a hard-fought campaign by Conservative MPs in the south-west to close the loophole that allowed second-home owners to avoid paying council tax by registering as a holiday rental, signing up for business rates, and then receiving business rates relief. To be business rated, properties will need to be available to let commercially for 140 days a year and actually let commercially for 70 days a year. That levels the playing field.

Secondly, the Government’s proposals for greater regulation include a registration scheme, which would help local authorities to monitor compliance with key health and safety regulations and give them much-needed data on activity in their area. The scheme will not just be another burdensome form-filling exercise for property-owners: the data will be critical in helping local authorities as they look to use new planning powers to restrict the way in which homes can be flipped into short-term lets. The Government consulted on the proposals over the summer but have yet to respond to the consultation. I urge the Minister to press on.

Thirdly, I believe that the Government can go further. When we build new homes, there is a risk that they get snapped up by property investors to rent out as short-term letting accommodation, which is why the Government must not only build new homes in the right places but make sure that they get into the right hands. Councils that can demonstrate a high number of holiday lets and second homes in their area should be able to reserve a percentage of new builds for people with a local, family or economic connection to that area.

At the moment, local planning authorities can impose on new developments a planning condition called a local connection test, but I am not aware of councils readily using that power to make sure that local people get first dibs on new homes specifically in tourist destinations. That is why I would like to see councils being able to reserve a percentage of new builds for people with a local, family or economic connection to the area. Under my proposal, the purchaser would have to meet conditions, such as living or working within 25 miles of the property, being born within 25 miles of the property, or having a care network within 25 miles of the property.

Ultimately, we need to strike a better balance, to help local people to rent or buy a home while also supporting tourism.

[Bob Seely (Isle of Wight) (Con)]

As ever, my hon. Friend is making an incredibly eloquent speech, with some important points about balance. One of the things that I hope the Minister will talk about is the need for constituencies such as my hon. Friend’s and mine—especially as mine is an island—to use exceptional circumstances to enable us more easily to design a housing policy that protects our landscape, which we need for quality of life and our visitor economy, while at the same time allowing us to relentlessly prioritise our local housing need. The one thing that we all share, apart from living in very beautiful parts of the UK, is that our tourism economy often means that our GDP per head is lower than it is in other parts of the UK, so it is sometimes more difficult for people to buy.

[Simon Jupp]

I thank my hon. Friend for making that point. He represents a beautiful constituency which, as an island, has its own unique issues, and I really respect that.

We need to strike a fairer balance so that local people can work in vital local industries such as tourism and hospitality without having to travel miles to get to work. Without workers behind the bar, in the kitchen or at the high street till, the hospitality and tourism industries simply would not exist in constituencies such as mine. Today’s debate goes to the heart of the sustainability of our communities and the south-west. That is why it is so important that we get the balance right.