Table of contents
On 24 July 2023, the House of Lords will debate the following question for short debate:
The Lord Bishop of Exeter to ask His Majesty’s Government what their plans are to address the housing crisis in rural and coastal communities.
A range of issues have been identified concerning housing in England, including the supply and affordability of homes, the quality of homes and their suitability for the future, mortgage rates, renters’ rights and housing benefit. Writing in July 2023, senior researcher at the New Economics Foundation Alex Diner argued “we are in the midst of not just one housing crisis, but multiple overlapping crises”.
The House of Lords Library has published several briefings providing commentary on a number of these issues, including:
- ‘Through the roof? Housing and the cost of living’, 8 March 2023
- ‘Housing in England: Issues, statistics and commentary’, 10 November 2022
- ‘Meeting housing demand: Built Environment Committee report’, 4 November 2022
- ‘Stability in the financial markets: Impact on pensions, mortgages and the rental market’, 27 October 2022
Coastal and rural communities face additional challenges. Reporting in 2019, the House of Lords Committee on Regenerating Seaside Towns and Communities argued that the provision of high-quality affordable housing was “essential” to create a renaissance in coastal communities. The committee noted that “issues relating to housing emerged as one of the most prominent concerns voiced by coastal towns”.
Labour MP for Plymouth, Sutton and Devonport Luke Pollard has highlighted the impact of an increase in second homes and holiday lettings on rural and coastal communities. He argued that the Covid-19 pandemic worsened the situation for these areas, claiming they were being “hollowed out irretrievably” by a surge in holiday homes.
1.1 Short-term lettings and holiday homes
Short-term holiday lettings are distinct from private residential tenancies and do not require an occupier to treat the property as their main residence. One of the most high-profile providers is Airbnb, a website where individuals advertise their properties as short-term accommodation.
Figures from the Department for Culture, Media and Sport consultation, ‘Developing a tourist accommodation registration scheme in England’, found that “one plausible estimate” for the total number of short-term and holiday lettings in England in 2022 was 257,000, although this was likely to be an underestimate. While there is no single, definitive source of data on short-term lettings, a number of sources suggest it is an increasing sector.
A factsheet from the then Ministry of Housing, Communities and Local Government used data from the English Housing Survey to explore the prevalence of second homes in 2018–19. The data showed that 2.4mn households in England reported having at least one additional residential property. Many of these properties were part of the private rented sector, but 772,00 households reported having second homes. Of the 2.4mn, 39% described their second home as a holiday home or a weekend cottage.
The figures were an increase from the 572,000 second homes registered for 2008–09, although the proportion of households reporting a second home remained unchanged at 3%. The majority of second homes were in the UK. In England, the highest number of second homes, 27%, were in the South West, followed by 14% in the South East and 10% in London.
In 2022, BBC analysis of council figures suggested that the number of holiday lettings in England rose by 40% in three years. The data was based on the responses of 152 local authorities who responded to the BBC, approximately half of the local authorities in England. The BBC highlighted the seaside resort of Scarborough as having the highest number of holiday lettings, followed by North Devon and East Suffolk. Other areas that had seen an increase in holiday lettings between 2018 and 2021 included:
- Isle of Wight: up 39%, from 908 to 1,262
- South Norfolk: up 97%, from 117 to 230
- Cotswolds: up 25%, from 802 to 1,002
- York: up 49%, from 448 to 669
- Great Yarmouth: up 44%, from 871 to 1,251
- East Riding of Yorkshire: up 51%, from 549 to 831
Research by the CPRE, formerly the Campaign to Protect Rural England, showed a 1000% increase in short-term lettings nationally in 2015–21, with “startling figures” in locations such as Cornwall, Devon, South Lakeland and Northumberland. The charity described this jump as “taking local homes off the market for local families and others”, arguing that waiting lists for social housing would be reduced or eliminated if the number of properties listed as holiday lettings were available for local families.
Supporters of short-term lettings have pointed to positive impacts, including economic benefits to the local communities where the lettings were based. The government sought information on the potential negative, as well as positive, impacts of short-term lettings as part of its consultation on a potential registration scheme. Analysis of the results of the consultation showed that 52% of local authorities thought that noise and anti-social and nuisance behaviour was a major problem. This contrasted with hosts, who were the least likely to report this as a problem. Concerns about the potential impact of short-term lettings on the housing market were also raised, with 35% of respondents saying that the increase in short-term and holiday lettings was a major problem. A further 31% said it was a minor problem. Concerns were also raised about potential health and safety issues, and a lack of clarity over responsibility for safety matters and the absence of a dedicated monitoring and enforcement body. Several respondents mentioned the impact of short-term lettings on community cohesion. They pointed to concerns that those who provide community services, such as nurses, teachers and police, were no longer able to afford to live in the community.
1.2 Housing affordability
In May 2023, the Rural Services Network (RSN), a special interest group of the Local Government Association, and Citizens Advice—Rural Issues Group, the umbrella body for 161 local Citizens Advice offices that work across rural England and Wales, published the ‘Rural cost of living survey 2023: Final report’. The survey pointed to the growing issue of housing affordability in rural areas, with 20% of respondents indicating that housing costs consume between 30% and 50% of their net or take-home income. A further 4% reported that housing costs take up more than 50% of their net income. The RSN called for urgent policy interventions “to address the rural housing crisis” and “ensure that rural living remains sustainable and affordable for all”, including:
- measures to increase the supply of affordable housing
- initiatives to support low-income households
- strategies to mitigate the impact of the rising cost of living
The National Housing Federation (NHF) has also identified issues with affordability and a growth in social housing waiting lists in rural England which, it says, are increasing more quickly in rural than urban areas. While welcoming the benefits of a growth in tourism to the local economies of rural locations, the NHF argued that it also presented “significant challenges to those communities”.
In June 2023 NHF research suggested that average private rents are unaffordable for most key workers in nine out of 10 rural areas. It published a report, which emphasised the impact of poor housing on health and wellbeing, and the significant impact that the housing system had on the local and national economy, jobs, and skills. It called for a long-term plan for housing:
[…] to meet housing need, marshalling and shaping the contributions of national and local government, housing associations, communities and the private sector. This plan would drive long-term investment in our existing homes and the new ones we need. It would feed into cross-government policy change, on housing, planning, health, skills, net zero and much else. And it would deliver widespread benefits across the country.
The campaigning group, Action on Empty Homes, argued that there were over one million homes with no residents. The group seeks to raise awareness of the impacts of long-term empty homes and to change national policy. It argues that while the latest government data shows around 250,000 properties in England have stood empty for more than six months, this is not the whole story:
Another 207,000 empty homes are covered by exemptions and do not pay any council tax. Officially total vacancy now stands at over 686,000 … but even that isn’t the full picture. This figure excludes a further 257,000 so-called ‘second homes’ or ‘furnished empties’ and over 70,000 second homes flipped to paying business rates as permanent short-lettings.
The Action on Empty Homes figures include properties in towns and cities, but the group also provides a more detailed breakdown of the location of empty properties and second homes. This shows that although the City of London has the highest proportion of homes out of use, it is followed by the Isles of Scilly in the South West and North-Norfolk in the East of England.
The group called on the government to strengthen empty dwelling management order powers and to remove the need to prove vandalism, antisocial behaviour or dangerous dereliction are associated with an empty home before action can be taken. In addition, it sought a new nationally funded empty homes programme with funding devolved to local councils to choose the right mix of ‘stick and carrot’ measures to deal with their local empty homes problems.
2. Government policy
2.1 Empty homes premium
An ‘empty homes premium’ currently exists, although the government has announced plans to strengthen it.
Currently, the council tax system in England allows district and unitary councils to charge an ‘empty homes premium’. This is a higher rate of council tax on properties that have been “unoccupied and substantially unfurnished” for certain periods of time. For example, in England after a property has been “unoccupied and substantially unfurnished” for two years, an authority can charge up to 200% of the normal council tax bill.
Some properties are exempt from the premium and statutory limits apply to how much a council can charge. The aim of the premium is to encourage the owners of empty properties to bring them back into use.
The government has announced provisions to allow local authorities to charge a council tax premium of up to 100% on second homes within the Levelling Up and Regeneration Bill. The bill would introduce a power to set an empty homes premium on properties which were “substantially furnished” and have no permanent resident, so covering properties which are used as second homes. In addition, the bill would change the two-year limit in England to one year.
The campaign group Action on Empty Homes welcomed the changes proposed in the bill, but it claimed they did not go far enough. It contrasted the national empty homes programmes in Wales and Scotland with the lack of a national scheme in England. In Wales, the government has announced a £50mn ‘National empty homes scheme’. In Scotland, the government published its long-term housing strategy in 2021, which included plans to work with local authorities to audit empty homes and establish a new fund to bring empty homes back into residential use.
2.2 Short-term lettings
Currently, the regulation of short-term lettings is limited in England; this contrasts with regulation of the sector in Wales and Scotland. Currently, outside of London there are no specific limits on the number of days a property can be let out on a short-term basis.
The government has made some announcements regarding plans for the regulation of the sector in England. Provisions in the Levelling Up and Regeneration Bill would give the secretary of state power to establish a registration system for short-term lettings. The government ran a consultation on the scope of the scheme between April and June 2023. The government is currently analysing the responses, with a consultation response expected “in due course”.
Concurrently, the government ran a consultation on the introduction of a use class for short-term lettings and associated permitted development rights. The government has said that the planning measures would give local areas a greater ability to control any future increase in the number of short-term lettings in their area and support the retention of existing properties to buy or to rent. The consultation has closed and responses are currently being analysed.
In response to the House of Lords Committee on Regenerating Seaside Towns and Communities report, the government has also pointed to funding available to coastal communities, stating:
This government is committed to coastal communities and levelling-up across the union. We are working with local leaders to ensure every region, city and town will recover from Covid‑19 and ultimately level-up. We have continued to make significant progress in supporting coastal communities in a number of areas, demonstrated by the coastal communities fund now having supported 359 projects, totalling over £229mn since 2012.
In March 2023, the House of Lords Liaison Committee held follow-up evidence sessions on the report. Giving evidence to the committee, parliamentary under secretary of state for levelling up, Dehenna Davison, again emphasised funding available for coastal communities:
While the ‘Levelling up’ white paper does not focus specifically on coastal communities, the focus on those 12 missions will hit a large number of coastal communities. While coastal communities share some challenges, I do not think that they are entirely homogenous. Some places will have issues around second home ownership, whereas for others it will be pay, productivity and housing standards. It is important that we take a holistic, top-down approach in government. Broadly, I think that we are making good progress towards levelling up. It is an almighty mission; there is still a long way to go […] On regeneration, it is clearly not all about funding, but funding is a vital part of this. When you look across many funds, be it the towns fund, the shared prosperity fund or the levelling up fund, a large number of coastal communities benefit from that funding.
The Liaison Committee has announced it will produce a follow-up report on the regeneration of seaside towns and communities which will be sent to the government and debated in the House of Lords chamber.
3. Read more
- House of Commons Library, ‘The growth in short-term lettings (England)’, 19 May 2023
- House of Commons Library, ‘Tackling the under-supply of housing in England’, 19 May 2023
- House of Commons Library, ‘The future of coastal communities’, 5 September 2022
- House of Commons Library, ‘What is affordable housing?’, 26 March 2022