Short-term Holiday Lets: Planning

Derek Thomas Excerpts

Tuesday 23rd May 2023 Westminster Hall

[Derek Thomas (St Ives) (Con)]

I thank my hon. Friend the Member for Torbay (Kevin Foster) for securing the debate and ensuring that a Minister from the Department for Levelling Up, Housing and Communities will respond. My hon. Friend has comprehensively set out why this debate is needed. Tourism is vital for my constituency, as it is for his. I have discussed the impact of holiday lets with the Tourism Minister, but although tourism sits with culture, media and sport, the effect of holiday lets needs to be addressed as part of the planning system, as we have heard. Holiday lets have grown by 661% in Cornwall in five years, according to the Campaign to Protect Rural England. That means that there is less property available for homes. I can assure the House that house building has not grown at the same rate, so the inevitable has occurred: families have lost their homes and the insatiable demand for housing goes on.

The consequence of this gold rush for short-term holiday lets, particularly because people have discovered through various TV programmes and the G7 that Cornwall is a great place to visit, is that prices are driven out of reach for local residents and for people who could become local residents. Like other Cornish MPs who are here today, I speak to NHS managers who are unable to persuade carers, nurses or dentists to relocate to west Cornwall, and to Cornwall generally, because they cannot afford to live there. I speak to businesses that want to expand, but that have the same difficulty with attracting staff. By taking action on holiday lets, we will not just level up on housing; we will also level up on health disparities and economic disparities.

The planning system exists to protect amenity in the public interest, but a disproportionate number of holiday lets hit amenity more than most developments, making schools, shops, churches and clubs unsustainable. Local authorities need the ability to protect their communities—a point well made by my hon. Friend the Member for Torbay. The Government are rightly consulting on a new use class for holiday lets, but we need a joined-up approach across Government.

As my hon. Friend the Member for North Devon (Selaine Saxby) correctly pointed out, there are incentives for landlords to switch from long-term rentals to short-term holiday lets, and landlords have followed the incentives. One in 10 holiday let companies were previously registered as buy-to-let businesses. I know we want to stick to planning, but this issue needs to be addressed across Government. Some of these incentives come from the Treasury, such as when it stopped buy-to-let businesses claiming their mortgage costs against tax. Those incentives will only get stronger as interest rates continue to drive up landlords’ mortgage rates. Will the Minister talk to Treasury colleagues so that both Departments are working in the same direction?

The Department for Energy Security and Net Zero has still not clarified whether it will act on its proposals to require rental properties to have an energy performance certificate rating of C or above. That means that landlords are already switching to holiday lets, which are not subject to the same minimum energy efficiency standards. Last July, the Government announced a review of the methodology used for EPC ratings. We all recognise that the current system is not fit for purpose and delivers wrong outcomes for the people living in the property. An update on the review would be welcome.

There is a lack of clarity about properties that will never be able to reach a C rating. The art deco flat owned by my constituent has curved windows that cannot be double-glazed and curved walls that cannot be insulated. It is not listed, so it may not be exempt; the only option then would be to use it as a holiday let. Will the Minister work with her colleagues in the Department for Energy Security and Net Zero to provide certainty and clarity on EPC standards for long lets and on the review of EPCs?

Finally, the Department for Levelling Up, Housing and Communities is increasing protection for renters, but the legislation must balance that with the rights of landlords. I hear the passion of Opposition Members about section 21, but landlords are already worried about what that will mean for them. People who have properties or were left properties and were thinking about providing long lets are considering turning them into holiday lets. One landlord put it to me that the Department has assumed that all landlords are Rachmans, and he was tempted to throw in the towel and switch to holiday lets. Will the Minister assure my constituent that private landlords are a valuable part of the solution to the housing crisis and that the Government will ensure that they are not replaced by holiday let businesses?

I suspect that there are constituencies that do not present the same pull factor for people planning their holidays, but in areas such as west Cornwall and Torbay, urgent action is needed to address the squeeze on housing for people who live and work in those beautiful parts of the nation. We love our tourism, but local homes are needed to ensure that strong local communities survive.