According to Generation Rent, the number of second homes and holiday lets in England peaked in 2024 at 347,000 and dropped to 336,000 last year. This came after the government permitted local authorities to increase council tax on second homes with a 100% premium, and made it harder for holiday lets to qualify for tax breaks.
Currently, over 70% of English councils charge a council tax premium on second homes.
Generation Rent said the decline in holiday homes ended the trend seen over the last decade of more homes under this ownership, which made it harder for renters and aspiring homebuyers to find suitable homes.
In 2015, there were 39,000 holiday lets registered for business rates and 245,000 second homes registered for council tax.
By 2022, the number of these homes had increased by 35,000 and 12,000 respectively, partially due to the popularity of platforms like Airbnb, the Covid-19 pandemic restricting international travel and tax advantages.
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Since April 2023, holiday let properties in England can only apply for business rates if they are available for commercial let for at least 140 nights in the previous and current year or are actually commercially let for 70 nights or more in the last 12 months.
Otherwise, owners of holiday lets will have to pay higher council tax rates.
Generation Rent has called on the government to build on this progress by giving councils the power to license holiday lets and limit their number.
Dan Wilson Craw, deputy chief executive of Generation Rent, said: “Everybody needs a secure home they can afford, but in many parts of Britain, short-term holiday lets have been driving families out of their communities as landlords have switched from tenants to tourists.
“The recent policy changes appear to have started an encouraging decline in the number of holiday homes, though it seems that some owners have responded to the second homes premium by switching their tax status back to holiday lets. That means there is still more work to do to bring homes back into residential use.”
He added: “Holiday homes continue to rise in some areas, and councils still lack the powers they need to strike the right balance between local people and holidaymakers. The government should give local authorities in England powers to license holiday lets and limit their number to make sure communities can thrive.”
