Housing in Tourist Destinations

Debate between Steve Double and Richard Foord

Tuesday 28th November 2023 Westminster Hall

[Steve Double (St Austell and Newquay) (Con)]

I beg to move,

That this House has considered housing provision in tourist destinations.

It is a pleasure to serve under your chairmanship, Sir Charles. Returning to the Back Benches after two and a half years, I am very grateful that the very first time I apply for a Westminster Hall debate, I get one. I do not know what I have done to deserve it, but I am grateful for the opportunity. I could have chosen to speak about a number of issues affecting my constituents on my first occasion back in Westminster Hall, but housing has to be at the very top of that list.

Housing has long been an issue of concern in Cornwall, but it has without doubt become a crisis in recent years. It is the biggest challenge facing us today, especially in our coastal towns and villages. I am aware that Cornwall is not the only area to face this challenge, and many tourist areas across the UK face similar situations. I am pleased to see so many hon. colleagues present for the debate.

Without question, Cornwall is by far the best part of the United Kingdom. That is why so many visitors descend on us every year, to sample the delights of our duchy. I have always counted myself incredibly fortunate, not only to have been born there but to have lived there my whole life and to get to live for 52 weeks of the year somewhere that many people pay several thousand pounds to spend a couple of weeks each year. Visitors of course provide many economic benefits to Cornwall, but also bring many unintended consequences, with essential parts of our infrastructure being overstretched. The biggest impact that we see from tourism, however, is on our housing.

Let me make it clear at the beginning that this speech is not anti-tourist or anti-tourism. Tourism is vital to the Cornish economy. It is estimated that one in three households in Cornwall gain at least part of their income from tourism, and many thousands of businesses throughout the supply chain rely on visitors. But there has to be a balance, and there is little doubt that in recent years that balance has tipped too far. In providing accommodation for tourism, the impact of the number of second homes and holiday lets is proving damaging to many local communities.

We have seen many instances of local businesses and public services—ranging from hotels to our schools and hospitals—being unable to recruit key staff, with the lack of available housing given as the main reason why they cannot recruit or why people cannot move to start work. The impact is also felt in the cost of housing for local people, whether to rent or buy. With prices pushed up due to the inflated demand caused by tourism, the average price of a house in Cornwall is now £340,000, which is almost 20% higher than the UK average, and yet the typical wage in Cornwall is almost 30% lower than the UK average. The result is that too many local people are simply priced out of the market.

The situation in the rental market is only slightly better, with rents typically being 10% above the UK average outside London. It was therefore good news that the local housing allowance will be unfrozen and increased, as announced by the Chancellor in last week’s autumn statement, and that will be welcome news in Cornwall. The impact of all that is that too many people, especially our young people, have found it impossible to remain in the town or village that they were born and grew up in. Too few properties are available, and they will almost always be unaffordable.

Wider impacts might not be immediately obvious. For example, parish councils are increasingly responsible for more local services. One that contacted me only last week, Mevagissey Parish Council, is an excellent example of one such local council that is trying to do more for its community but is increasingly having to do so with less.

Local councils that do not have the general power of competence are restricted in what they can spend local taxpayers’ money on. If there is no specific statutory authority, the council can use what is called free resource. The free resource is calculated by multiplying a sum per elector by the number of electors, with the sum being set every year by Government. With an increasing number of residential properties being repurposed for holiday homes or second homes, there is a consequential reduction in the number of electors and, hence, a reduction in the free resource limit, meaning that parish councils and communities like Mevagissey are increasingly limited in what they can spend their funds on, leading to cuts in services that are often vital for those communities.

To put that in context, I have some statistics, provided by the Office for National Statistics, on the number of second homes or empty properties in communities in my constituency. In Newquay, the surfing capital of the UK and a very large town for Cornwall, 12% of properties are second homes; in St Goran parish, which is renowned for its Cornish gig club, the figure is 19%; in Mevagissey, the second most productive fishing port in Cornwall, the figure is 24%; and in the river port of Fowey, the figure is 28%. Twenty-eight per cent of properties are second homes in Fowey.

It is difficult for local authorities to calculate the numbers of holiday lets, but the numbers will be significant additions to these figures. As a flavour of the scale of the issue, CPRE estimated last year that short-term holiday listings in Cornwall grew by 661% in the five years to September 2021.

I have met Airbnb, our largest short-term letting accommodation provider, on several occasions to discuss how it, as an industry leader, can operate in a more responsible way, because there is a worrying trend, particularly since the pandemic, of landlords finding it far more profitable to put their properties on the holiday rental market over the summer season, leading to a significant rise in the number of no-fault evictions in March and April each year in our coastal communities. That results in many local people needing to find somewhere to live and often having to move out of the community in which they have been living, with all the upheaval that that brings to family life.

[Richard Foord (Tiverton and Honiton) (LD)]

I am grateful to the hon. Member for giving way and for securing this debate. He has been very vocal about short-term lets. He wrote to the Minister recently to ask about the introduction of a use class for short-term lets and associated permitted development rights. We had a consultation, which was open until 7 June this year, on that subject. It is now nearly six months later. Does he agree that six months is more than enough time to consider the results of that consultation?

[Steve Double]

I am very grateful to the hon. Member for his intervention. I will be coming to that point towards the end of my speech, but I thank him for raising it at this point.

I am confident that the Government’s landmark Renters (Reform) Bill will go some way to addressing this, but we need to look closely at the detail of the Bill to ensure that its measures will have no unintended consequences.

To put all of this in perspective, there are currently 18,989 live listings in Cornwall on Airbnb and other platforms. The vast majority of those properties were built to be someone’s home and are now no longer available for local people to live in. By comparison, in October 2023, there were just 895 available residential listings in Cornwall on Rightmove. Those holiday rentals are overwhelmingly in the coastal communities and tourist hotspots we are discussing. As I said earlier, we are not against holiday lets. Tourism is vital, but there needs to be a balance. We need more housing that is genuinely affordable to local people, particularly for our key workers.

The situation in Cornwall is serious. It is difficult to understate how bad it is. The perfect storm of increased demand, rocketing prices that outstrip average wages and a growing population has led to record numbers of people being on Cornwall’s housing register. Last week, there were 26,136 people waiting to be housed in Cornwall. Then there are those households that are currently without a home: sadly, 857 households in Cornwall are in temporary accommodation, and 438 of them are families with children.

The answer is not just to build more houses. Cornwall Council, under portfolio holder Councillor Olly Monk, has done an excellent job since the Conservatives took the lead in 2021 in accelerating house building: it has built 5,442 houses during that time, 1,322 of which are affordable and earmarked for people with a local connection. But over the past 20 years, Cornwall has had above-national average levels of house building, so our experience shows that we cannot simply build to meet the ever-growing demand. When a market is broken, we need the Government to intervene, and there can be little doubt that the housing market in Cornwall is currently broken.

I applaud the fact that the Government have taken more steps to address the situation than any other Government, often with some enthusiastic support from me and my Cornish MP colleagues. They have taken steps to close the business rate loophole, which allowed second home owners to claim that their properties were holiday lets and therefore qualified for small business rate relief. They thereby paid neither council tax nor business rates and contributed nothing to local services.

The Levelling-up and Regeneration Act 2023, which received Royal Assent at the end of the previous Session of Parliament, makes provision for local authorities to charge double council tax on second homes. People who own second homes and do not rent them out to local people should rightly pay more to make up for the fact that those properties have been removed from primary occupancy. That was the right thing to do, and the Government did it. Cornwall Council is keen to apply the provision as soon as possible because it will bring in an anticipated extra £20 million a year. The register of holiday lets is also welcome, as it will for the first time give local authorities a full and accurate picture of exactly how many properties in the communities they serve are being used as holiday lets. Knowing how many holiday lets there are is the first step towards being able to better manage their number in a community.

The Government have consulted on giving powers to local councils to require a change of planning permission when homes are taken out of residential use and converted to holiday lets. I know that measure is controversial for some of my colleagues, but for me it is simple: if planning permission was granted to build a house to be somebody’s home and the new owner wishes to change its use to a holiday let, which is essentially a business use, a change of use should be required. We insist on that for all sorts of other businesses, and I believe the same should apply to holiday lets.

Those are all good steps, and I want to put on the record my thanks to the Secretary of State and other Ministers who have listened and taken on board what we have said. The measures, which go towards addressing the issue, have been welcomed in Cornwall, but we need them to be implemented. We cannot allow the situation we have experienced in Cornwall in recent years to be repeated.

Although the measures are not a silver bullet, they provide some answers and enable us to improve the situation significantly. I ask the Minister to provide an update on when we can expect the register of holiday lets and the planning change of use requirements to be implemented, because we need them as soon as possible. I would also be grateful for the Minister’s thoughts on the impact that the situation is having on parish councils. What can be done to assist parish councils, which are losing their ability to support their local communities?

As I have laid out, the situation we face in Cornwall is complex and serious. I welcome the steps the Government are taking, but we need to see them implemented as soon as possible, because we need to be able to intervene. The situation we have seen in Cornwall in recent years can never be repeated. We need to work together to ensure that it improves as soon as possible.