The Liberal Democrats have proposed sharp restrictions on holiday rentals at the heart of the party’s plans to solve the housing crisis.

South Lakes MP Tim Farron – a former party leader – has led a debate in the House of Commons on what he calls “the housing crisis created by excessive second home ownership.”

He presented a seven point plan to limit the number of second homes and make more affordable homes available for local families:

1. Make second homes and holiday lets new and separate categories of planning use. This would mean that councils and national parks would have the power to put a limit on the number of such properties in each town and village, protecting the majority of houses for permanent occupation;

2. Provide targeted, ring fenced finance so that planning departments have the resources to effectively police this new rule;

3. Give councils the power to increase council tax by up to 100 per cent on second homes in the worst affected communities – this would serve to protect those communities and it would also generate revenue that could then be ploughed back into their threatened schools and into new affordable housing for local families;

4. Force all holiday let owners to pay council tax, rather than avoiding paying anything at all if they are deemed a small business;

5. Give councils and national parks the power to ensure that 100 per cent of new builds are genuinely affordable;

6. Ban Section 21 evictions;

7. Ensure that platforms like Airbnb aren’t allowed to cut corners and undermine the traditional holiday let industry, and have to meet the same standards as other rentals.

Farron told the Commons: “I have spoken to MPs from rural communities from across this house – most of whom are currently Conservatives – and they all privately agree that this is a catastrophe.

“They see it in their own constituencies. The collapse of affordable, available housing for local communities is killing towns and villages in Cornwall, Northumberland, Shropshire, Devon, Somerset, North Yorkshire, in the Highlands, in rural Wales as well as in Cumbria.

“What our rural communities want from the minister today is two things: a sign that he understands that this catastrophe is actually happening and secondly, a commitment to act and to act right now.”

In response, housing minister Chris Pincher told MPs: “We recognise that the large number of second homes and holiday lets can have adverse effects in some areas so I will look closely at the proposals that he has tabled.

“But I’m bound to say to him that making changes to planning law to make second homes and holiday lets separate categories in planning use, though it has some attractions, also has some significant drawbacks.”

Instead the minister pledged to start a consultation later this year on a “tourist accommodation registration scheme in England, so we can build our understanding of the evidence and issues that second homes present, particularly driven by the rise of online platforms such as Airbnb”.

Farron commented that he welcomed the review but he was “not overwhelmed by a tidal wave of urgency – in fact quite the opposite. I want to say to the minister that inaction is action. It’s action on behalf of those who have multiple homes, against our communities.”