Speaking in the House of Commons last week, minister of state for Department for Levelling Up, Housing and Communities Christopher Pincher (pictured) said it would launch a consultation later this year and it would start the process for call for evidence in the coming weeks.
He explained: “We want to look at not just the issue of short-term holiday letting, but the effect that it has on supply. We will also look at compliance, health and safety regulations and the effect of antisocial behaviour and so on.”
The backbench debate was brought by Tim Farron, the Liberal Democrats spokesperson for Housing Communities and Local Government, to consider the impact of second homes and holiday lets on rural communities.
Several proposals were suggested to mitigate the impact of second homes on local communities, including making second homes and holiday lets new and separate categories of planning use.
Pincher said changing the planning law to add these categories had some benefits, but also had “significant drawbacks”.
“Use classes apply nationally in all cases, irrespective of whether one lives in a high tourism area. Therefore, a new use class would affect second homes and therefore potentially restrict the freedoms of homeowners, wherever they live, regardless of whether it is a high-use tourist area,” he said.
He added that the government was “committed to close the loophole” in the business rate system as soon as possible. The proposal states that properties should be required to be let for 70 days of a given financial year to be liable for business rates rather than council tax.
This will ensure properties have to reach a letting threshold before they can benefit from business tax relief.
Pincher said the government wanted to introduce a new infrastructure levy to replace section 106, which is an agreement between a developer and a local planning authority about measures that the developer has to take to minimise their impact on the community.
“We want a system that, again, is speedier and more transparent, that front-loads the funding for local authorities to use earlier in the development process, and that captures greater land value. Our infrastructure levy proposal, which colleagues will hear more about in the near future, will, we believe, achieve that,” he said.
Pincher added that the government was planning to further reform the planning system, which he said was “opaque, slow, and is not predictable”, and was not set up for SMEs who build different types of homes or different tenures.
Pincher said at the moment, one per cent of people got involved in their local authority’s local plan, and two to three per cent of local communities got involved in individual planning applications, which he said was too few.
He explained: “If we can build a system that is digitised and far more straightforward, it will engage more people in plan making, and that will buy in communities to the plans for those communities and their needs.”
MPs also raised concerns around second home and holiday let taxation policy Pincher said that the department, along with the treasury, would “keep these issues under close review”.
Impact of current legislation
Pincher said that since 2013, local authorities have been able to levy 100 per cent of council tax on second homes and 96 per cent of local authorities had made use of it. He said homes which are empty for periods of time can levy “more significant council tax surcharges”.
Pincher noted that a further surcharge for foreign purchasers of property had also been introduced.
He concluded: “I recognise that more must be done, but we must ensure that we get the right balance on the economic benefits of second homes, the social challenges that they can sometimes provide, the rights of homeowners to use their properties as they choose, and the needs of homeseekers wishing to live in or near the area where their friends, families or workplaces are located.”
Farron said he welcomed the review but wanted to see more done to investigate second homes at a faster pace.
Farron said it could take years to address some of the proposals suggested, which meant holiday lets would continue to grow in smaller communities and those at risk of dying “will be actually dead”,
“We need urgency right now, so I ask for further meetings immediately. The Minister talks about the planning rules, but how about letting national parks pilot the differential in planning use categories? That, at least, would be a start, to demonstrate that it could be possible. I am disappointed by the lack of urgency, but I am grateful for the opportunity,” Farron said.