During a House of Commons debate on planning permissions in the holiday let market, Tim Farron MP said: “There isn’t a housing crisis but a housing catastrophe”.
Farron said there were three reasons for the ‘catastrophe’: the lack of genuinely affordable housing being built; “excessive numbers” of second homes that had “gobbled up” full-time residences; and a “short-term rented sector that has gobbled up the long-term rented sector”.
He said in his constituency of Cumbria, the stamp duty holiday led to 80 per cent of transactions being second home purchases. He said it also resulted in long-term private rented residences “collapsing” into Airbnb with landlords evicting their tenants, “largely because the government did not scrap Section 21 at the time”. He said many of these evictees had nowhere else to go due to a lack of available properties.
Farron said a fairer housing market would need ambitious regulation but added that the problems were avoidable and fixable.
He added: “Short-term lets need to be a separate planning use so local authorities can make sure there are enough homes.”
Housing minister Rachel Maclean said the government was consulting on the introduction of a new use class which would result in a reclassification of all dwellings without the need for a planning process. There is also a proposal related to people letting out their main or sole home, as there is currently no defined limit regarding the number of days, which Maclean said could “lead to uncertainty”.
She said planning permission would be needed for those who wanted to let their homes out for longer than the defined limit.
The consultations close on 6 and 7 June which Maclean said was “generating a fair amount of interest”.
A register of short-term lets will also be introduced through the Levelling-up and Regeneration Bill, which Maclean said would help local authorities manage the supply of short-term lets.
Better investment opportunities
Simon Jupp, MP for East Devon, said in his constituency, local people were being priced out of homes that were often sold to cash buyers from elsewhere within days of coming to market.
Derek Thomas, MP for St Ives, said landlords had been tempted by the incentives attached to switching from long-term rental properties to holiday let, adding “one in 10 holiday companies were previously registered as buy-to-let businesses”.
He said this meant it was also the responsibility of the Treasury to remedy this as current tax burdens made holiday lets more attractive.
Thomas added that the lack of confirmation around minimum energy performance certificate (EPC) ratings was also prompting landlords to make the switch before legislation came in. Additionally, he said there was a lack of clarity around properties which will never be able to reach minimum EPC standards and whether they would be exempt from any rules.
He said: “Can the minister [Maclean] work with her colleagues in the department for net zero to provide certainty and clarity both in relation to EPC standards for long lets, and the review of the EPCs themselves?”
Referencing the Renters’ Reform Bill, Thomas said the Department for Levelling up had increased protections for rental tenants but needed to balance this with protections for landlords to prevent them from moving to holiday let.
He added: “Can the minister assure my constituents that private landlords are a valuable part of the solution to the housing crisis and the government will be ensuring that they are not replaced by holiday let businesses?”
Matthew Pennycook, MP for Greenwich and Woolwich, said London had been particularly affected by the rule introduced by David Cameron’s government in 2015 which allowed properties to be let for up to 90 days a year without the need for planning permission. He said the government was warned at the time that this would have “harmful consequences”, adding: “but those warnings went unheeded, and short-term let abuse is now rife in many parts of the capital as a result”.
Pennycook said the deregulated nature of the short-term letting sector was “deeply problematic” and said current measures were “insufficient”.
Things are being done
Anthony Mangnall, MP for Totnes, said the government had already changed legislation around holiday lets in “quite an effective manner” such as the amendment to business rates which determines how long properties must be let for to be relieved of the tax, to increasing council tax rates to 200 per cent on empty properties and second homes, as well as a review of how neighbourhoods are planned.
He added: “There is a large body of legislation that isn’t just being promised, but has already been delivered.”
He said it was not correct to say nothing had changed but asking for more houses meant more needed to be built, as changes to holiday let alone would not address the lack of housing.
Mangnall said it was also about encouraging investment from landlords, adding: “We have to have measures that will encourage long-term landlords who will put their properties into the market and make them available for people to be able to rent.”
