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Welsh Government announces three-pronged approach to address “second homes crisis”

 

In the Senedd later today, Minister for Climate Change Julie James will set out an “three-pronged approach” to address the impact of second home ownership on Wales’ communities.

The new plan has fairness at its heart - ensuring that everyone in Wales can have access to good quality, affordable housing.

The three-pronged approach will focus on:

  • Support – addressing affordability and availability of housing,
  • regulatory framework and system- covering planning law and the introduction of a statutory registration scheme for holiday accommodation; and
  • a fairer contribution – using national and local taxation systems to ensure second home owners make a fair and effective contribution to the communities in which they buy.

There will also be a pilot area in Wales – to be decided over the summer - where these new measures will be trialled and evaluated before being considered for wider rollout.

Other supporting actions, including the work on a registration scheme for all holiday accommodation and a consultation on changes to local taxes to manage the impact of second homes and self-catered accommodation, will also begin over the summer.

A Welsh Language Community Housing Plan, to protect the particular interests of Welsh language communities, will be published for consultation in the autumn.

Last year, Wales became the only country in the UK to give local authorities the power to charge 100% council tax increase on second homes.

Visiting a housing development in picture-postcard St David's, West Wales, the Minister met with members of the local community, Pembrokeshire Council and the Community Land Trust to hear how they have been working together to use money raised from the council tax levy to build 18 new affordable homes for local people. 

Speaking from St David’s, Minister for Climate Change, who is responsible for housing, Julie James said:

“Meeting with Rachel, Josh from the Community Land Trust, Pembrokeshire Council, and the developers ateb today, has demonstrated how community action and good government policy can work together to bring fairness back into our housing market.

 “The continuing rise of house prices mean people, especially younger generations, can no longer afford to live in the communities they have grown up in. A high concentration of second homes or holiday lets can have a very detrimental impact on small communities, and in some areas could compromise the Welsh language being spoken at a community level.

 “We have already taken strides on some of these issues - last year we became the only nation in the UK to give local authorities the power to introduce a 100% council tax levy on second homes. But the urgency and gravity of this situation calls for further intervention, which means real and ambitious actions are delivered at pace, to inject fairness back into the housing system.

Flower

“Taking recommendations from Dr Brooks’ report, our new three-pronged approach will kick-start a summer of action which will determine how we tackle this issue now and into the future. I am calling on all political parties across the Senedd to get involved in this, as we look to empower our communities to exercise their right to live in good quality homes, wherever they are in Wales.

Welsh Conservative Shadow Minister for Climate Change (responsible for housing), Janet Finch- Saunders MS said:

"Yet again the Welsh Government has chosen to make announcements to the press before the Senedd. The Minister claims that she wants all parties to get involved, but it is S4C I have to thank for doing what Welsh Ministers are failing to do: respect our Welsh Parliament.

“There is no denying that the continuing rise of house prices mean people, especially younger generations, can no longer afford to live in the communities they have grown up in. However, the Minister has made a grave error by linking this to second homes.  

“The report by Dr Simon Brooks made important points, including that there is little evidence that second homes are the main cause of high house prices as opposed to buyers moving to reside there permanently.

“It is clear that in many communities in North and West Wales local people are unable to compete in the housing market against buyers from outside the community, so if this Senedd is truly committed to cooperating cross-party on the housing crisis, I ask that the Minister agree to restore the Right-to-Buy in those crisis communities in Wales, reinvesting sale proceeds into more social housing and protecting homes from sale for 10 years.

“My crisis communities Right-to-Buy solution would be of huge benefit to areas like Abersoch and Aberdaron which have an income to house price affordability ratio of 10.7:1.

“Similarly, the Minister needs to reconsider the proposed statutory registration scheme for holiday accommodation. As she knows well, holiday lets that are registered for business rates have to meet strict criteria to qualify, so I struggle to see what the new scheme would achieve other than bureaucracy that absorbs taxpayers’ money.

“The Minister should also address the fact that any increase to land transaction tax could create a crisis for the rental sector, which would be a disaster for communities like Bangor and Caernarfon; and that the trialling of the pilot in a specific location could simply displace the problem to other areas.

“The crisis communities Right-to-Buy solution I am proposing would empower local people now and in future to have a home in their local area. It is an exciting policy which deserves a chance”.

Over the summer Welsh Government will work to:

  • Work with stakeholders to agree the basis and location or locations for an evaluated pilot;
  • Develop a coherent and effective support package to trial within the pilot;
  • Frame a statutory registration scheme for all tourist accommodation and continue to engage with stakeholders on the shape of the model we will implement, including both the registration and inspection arrangements;
  • Consult on possible changes to local taxes to support local authorities manage the impact of second homes and self-catered accommodation; and
  • Establish a draft Welsh Language Communities Housing Plan for consultation in the autumn.

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