Second homes and holiday-lets in rural communities

Statistics on second homes

The Department for Levelling Up, Housing and Communities (DLUHC) has produced a fact sheet on second homes, and the characteristics of the people owning them: English Housing Survey 2018 to 2019: second homes – fact sheet. These figures are based on estimates from the English Housing Survey (EHS).

In 2018/19, an estimated 772,000 households reported having second homes. The EHS defines these as “homes that are primarily used as holiday homes (by family, friends or let to others as a holiday let) or are occupied while working away from home.” Some households have multiple second homes. In total, the EHS estimates that English households owned 873,000 second homes, of which 495,000 were second homes located in the UK.

Some local-authority level data on second home ownership is available from Council Tax records. The Office for National Statistics (ONS) explored this data in a report published in September 2021: House prices in tourist hotspots increasingly out of reach for young and low paid (see map titled ‘Second home ownership is concentrated in tourist hotspots).

Concerns about second homes

The term ‘second home’ is usually used to refer to a property which is not the owner’s sole or main residence. However, the term can cover a range of uses, including: a second home in which the owner regularly resides; a holiday home; or a property purchased as an investment and left unoccupied. Furthermore, a holiday home may be used occasionally and left empty for most of the year, or it might be used for short-term holiday lets and occupied for most of the year.

The impact of second homes on local communities is complex and multi-faceted. On the one hand there are concerns that where the number of second homes comprises a significant proportion of the housing market, it can reduce housing supply and push up house prices to unaffordable levels for local people.

A high number of second homes which remain empty for long periods may also impact on local services and community cohesion. On the other hand, if second homes are used regularly as holiday homes they may boost local economies and the tourism trade, or a second home may enable someone to work in and contribute to the local economy of an area, while being able to return to a family home in another part of the country on a regular basis.

In December 2021, in a Westminster Hall debate on affordable housing: planning reform led by Derek Thomas MP, several Members raised the matter of second homes and holiday lets in their constituencies.^[1]

In the UK, policies to mitigate the impacts of high rates of second home ownership may be implemented by local government (for example through planning restrictions and council tax) and by central government (for example through the planning law and policy, taxes, and regulation of short-term lettings/holiday accommodation).

A review of evidence on second homes in July 2021, commissioned by the Welsh Government, concluded that there is currently limited evidence of the effectiveness of various policy interventions on the demand for second home ownership.[2]

The Government’s stance on second homes and holiday lets was set out in reply to a Parliamentary Question in June 2021:

The Government recognises the benefits that second homes and short-term holiday lettings can bring to local economies and to the tourism sector. Holiday letting increases consumer choice and encourages the dispersal of tourism across the country, bringing domestic and international tourists to new areas and allowing households with underused accommodation to supplement their income.

However, the Government also recognises the adverse effect that large numbers of second homes can have on some areas, and that is why we introduced a series of measures to help mitigate those effects, such as a 3% higher rate of Stamp Duty Land Tax (SDLT) for those purchasing additional properties.

Under our new First Homes scheme for first-time buyers, which provides properties with a discount of at least 30%, local authorities are able to restrict eligibility to local people for the first 3 months of marketing to ensure that local first-time buyers are prioritised.

The Government recently published the Tourism Recovery Plan (opens in a new tab) which includes a commitment to consult on a possible tourist accommodation registration scheme. Such a scheme could be used to underpin future government interventions, for example regarding the regulation of short term letting. The Government is committed to hearing views of all interested parties on the scheme.[3]

[1]      HC Deb 7 December 2021 c53WH onwards

[2]      Welsh Government, Research on second homes: evidence review summary, 13 July 2021

[3]      PQ 20450 [Holiday Lets and Second Homes: York], 30 June 2021