Second Homes and Holiday Lets: Rural Communities — [Mr Virendra Sharma in the Chair]

Part of Backbench Business – in Westminster Hall at 1:53 pm on 6th January 2022.

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Photo of Rachael Maskell Rachael Maskell Shadow Minister (Digital, Culture, Media and Sport) 1:53 pm, 6th January 2022

I thank Tim Farron for opening the debate so well, as we see a surge of second homes and holiday lets. We all know that our constituents need local homes for local people. They are being priced out of their communities and the wrong houses are being built, all at a cost to the local economy. This is about cost, tenure, and impact.

York is no different from rural areas; it is not about location but housing tenure and use, not least for a holiday destination. York has residential streets full of holiday lets, fragmenting communities in areas where second homes have a prevalence. We have new developments that are increasingly attractive to investors but unaffordable for local people. That includes the 2,500-unit York Central development, which even Homes England recognises could be dominated by second homes and holiday lets—it is now being dubbed “Airbnb central”. The wrong kind of housing is being developed; the site should be about public land being used for public good.

I do not chastise the Government for their focus on housing numbers, but in York, we need growth for our local people, and that focus is propping up second homes and the lettings market, and causing the housing market to overheat at the expense of local families being pushed further away from our city. The solution is local homes for local people, whether they already live in York or are moving to serve our local economy and public services.

Let me address costs. York receives more than 8 million visitors a year. The holiday let business is booming, not least as covid-safe staycations have been such a feature of the pandemic. York’s pressure-cooker housing market saw an increase of 14%—£36,000—in the average property price in the year up to August. First-time buyers spend 23% more on housing than they did five years ago. York’s affordability ratio is 8.3 and rising sharply. Family homes are being snapped up as holiday lets or second homes, and it is more lucrative to convert student lets to holiday lets, so we now have a problem with student accommodation. York’s superb connectivity and new ways of working mean that the opportunity to own a second home in York has become even more attractive to weekly commuters.

On tenure, developers are building units for investors, not to meet local need. They are perfect for short-term breaks but hopeless for local families, even though family homes constitute 80% of those needed. That is why the numbers game just does not work and the planning system does not deliver. It is a false economy: housing units are getting ticked off but housing need is not being addressed. It is a developer’s dream, as they can name their price, but a local person’s nightmare, as they are pushed away from our city.

On the impact, we cannot recruit those with the vital skills to staff our NHS or social care. We cannot staff our local economy, particularly in retail and hospitality, as people can no longer afford to live in York, and that problem has reached crisis point in some professions. The gentrification of our post-industrial city is coming at a heavy cost, not least as local families are now being driven away by the net loss of council housing and a housing waiting list that has tripled in my short time in Parliament. The unaffordable rents and market housing costs are forcing people to live and work elsewhere. Too many people are now at the mercy of unscrupulous private landlords or in overcrowded social housing. It is breaking our city. Local homes for local people is imperative.

I will make five suggestions. First, we need proper local data, including a register of housing lets and a register of second homes.

Secondly, we need to fix local taxation. Business rates do not work here, as we all know, so on top of council tax, a council tax levy should be paid by people who have the privilege of owning a second property for holiday lets. After all, people renting still use local services and need their bins collecting.

Thirdly, on planning, we need to build local homes for local people. The planning system does not currently accommodate that, and the obligations and incentives have a perverse impact. A residence test is required, and although I would welcome such a measure, it is about more than that. We need to address the problem not just at the point of sale, but when the land is being developed, and consider the obligations placed on developers. We need to review the local planning process—I appreciate that we have not had a local plan since 1954, which is escalating the problem—and I trust that the Minister will deliver that for us this year. He needs to bang heads together at our local authority to deliver that, because we absolutely need to look at the planning system in today’s context.

Fourthly, on financial incentives, scrapping the mortgage tax relief on holiday lets is absolutely essential, as is looking at how stamp duty can be even better used as a disincentive for second home ownership. When disposing of public land, instead of chasing one-off land receipts, investment in the long-term interests of the community and the socioeconomic outcomes should be the prime focus.

Fifthly, we should also limit the time for which holiday homes can be let, as has been done in London and Europe. That will curb the behaviour of some of second home owners and ensure that those homes can go to local communities.

We need the principle of local homes for local people to govern every housing decision so that we can once again have a vibrant community.