Opinion: Budget measures on second homes will help our housing crisis

The Spring Budget had many positives, especially housing in tourist areas like North Devon.

Tackling the housing crisis in North Devon has been a mission of mine for many years. I do not use the word crisis lightly, but there is no doubt that we have a crisis whilst we have such visible manifestations of it, such as families living in holiday parks.

In February of this year, it was very welcome news on the announcement from the Department for Levelling Up, Housing and Communities on short term holiday lets registration, which will also protect communities and keep more homes available for local residents.

The new reforms will see councils be given greater power to control short term lets by making them subject to the planning process.

This will support local people in areas where high numbers of short term lets are preventing them from finding housing they can afford to buy or to rent.

I have worked with colleagues right down the Devon and Cornwall peninsula for a number of years to try and rebalance our housing markets.

This work has been cross departmental and having led on the amendment on holiday lets in the Levelling Up and Regeneration Bill, now Act; having made 23 speaking contributions regarding short term lets in Westminster since 2019, 58 contributions regarding housing in general, as well having written multiple letters to ministers, it was very welcome today to hear that that the tax regime between long term and short term rentals will now be harmonised.

In an ideal world I would have cancelled George Osborne’s tax reforms of 2016, which came into effect in 2020 and saw mortgage relief cancelled for long term rentals, with a specific exclusion for furnished holiday lets, as I believe we need to take steps to encourage long term landlords back to the market.

However, the Chancellor has confirmed the Government will remove the current incentive for landlords to offer short term holiday lets rather than longer term homes by abolishing the Furnished Holiday Lettings (FHL) tax regime.

This will level the playing field between short term and long term lets and support people to live in and work their local area. This will take effect from April 2025 and draft legislation will be published in due course.

We have fantastic hotels, campsites, holiday parks, as well as short term holiday lets – but we need staff to work in these businesses, as well as our other hospitality businesses to ensure our vital tourism sector continues to thrive.

Whilst some may focus on this as a tax rise, I see it as a welcome nudge in the housing market. At a local level, even if only 10 properties, as a result of these changes, say in Ilfracombe, switch from being holiday lets to full time homes, it would be a positive step.

That is 10 families or individuals who have a home, who will be contributing and working in the community, 10 families or individuals that will not be adding pressure to the rental market or be on the council’s housing list. These potential 10 families in Ilfracombe will have had their lives dramatically changed for the better.

North Devon is a thriving tourist economy and I recognise that for some short term holiday let owners, this is not a welcome piece of news.

But we need to rebalance our housing market in North Devon so more families that want to live and work here can do so.

We need to free up some of the properties that sit empty for large parts of the year to house local people, and hopefully changes to the holiday lets alongside the capital gains tax cut will help start to tackle our housing crisis.