Growth in holiday lets nearly cancelling out supply of new homes in some areas, Generation Rent finds

Generation Rent found that in seven areas, including parts of the Lake District, North Yorkshire and Devon, the growth in holiday homes effectively cut new supply by more than half, which it said makes it harder for councils to accommodate their local populations affordably. 

Torridge in Devon experienced a holiday home growth equivalent to 63% of new supply: in South Lakeland in Cumbria that figure was 63%, Scarborough 56%, Richmondshire in North Yorkshire 49% and North Norfolk 42%.

The worst-affected London borough was Southwark, where 4,004 new homes were added to the stock, but 2,428 were lost into the second homes sector (61%).

Cornwall, where 8% of homes are second homes or holiday lets, had a growth in holiday homes equivalent to 27% of new stock.

The government is currently consulting on a registration scheme for short-term lets, as well as requiring owners to have planning permission to let to tourists. Both consultations close on 7 June. However, existing holiday lets are set to get automatic permission.

Generation Rent is calling for powers for councils to license holiday lets and cap their numbers, and for the withdrawal of tax breaks, in order to reverse their recent growth. 

Dan Wilson Craw, acting director of Generation Rent, said: “The unregulated and undertaxed holiday let sector is out of control. It has taken homes away from locals who grew up in holiday hotspots and people who want to work in the tourist industries, making these areas unsustainable. 

“A large part of the solution to high rents is more housebuilding, but locals won’t see the benefits of this if houses continue to leak into the holiday homes sector.

“It is welcome that the government is looking at ways to regulate holiday lets, but there is a huge risk that the proposals will lock in the sector’s recent growth and make it harder to bring down rents by switching properties back into residential use.”

A Department for Levelling Up, Housing and Communities spokesperson said: “We remain committed to delivering 300,000 new homes per year and we are investing £11.5bn to build the affordable, quality homes this country needs.

“We are aware of concerns around the proliferation of short-term lets in certain areas. We want to ensure we can provide a safe and competitive guest accommodation offer, while making sure there are homes for local people.

“We are consulting on a registration scheme for short-term lets and on the introduction of a short-term let use class and associated permitted development rights. 

“These changes would give councils more control over the number of new short-term lets, and help them to meet local housing needs.”