New curbs on holiday lets are “inhumane”

The latest restrictions imposed on holiday lets by a UK government are hurting local economies.

The Welsh Government has confirmed there will be no further exemptions to new regulations regarding the periods of time holiday lets should be occupied.

Prior to April 2022, holiday let owners in Wales had to demonstrate availability for at least 140 nights, as well as 70 nights actually let to qualify for Business Rates. This was then significantly increased to 252 days of availability and 182 days actually let.

Whilst holiday let owners can remove their properties from council tax – by switching it to Business Rates – it’s being suggested that these increased minimum let requirements could force some holiday let business owners into serious financial hardship should they ever suffer an illness or if unforeseen circumstances meant the accommodation must temporarily shut.

If that did happen, there is no grace provided for falling below the 182 nights meaning the council tax premium will still kick in providing a double whammy for an owner unlucky enough to fall ill or need to close to make emergency repairs.

The holiday lettings firm Finest Retreats describes this as “inhumane” and claims that it demonstrates the Welsh Government’s poorly written legislation.

A statement from Finest Retreats says: “The lack of exemptions also seriously risks underinvestment in the upkeep of properties and will significantly harm local trades. If accommodations cannot risk closing their doors for the risk of falling below the 182 nights threshold, they cannot close for refurbishment.”

The agency says it’s already received reports from one of its owners, who cancelled a £12,000 refurbishment project with local builders because they did not want to risk closing for the four-week period over the winter.

Finest Retreats founder Richard Bond says: “The significant increase in availability and let requirements is a huge hurdle for holiday lets in Wales. The lack of extensions to exemption, following various government promises, is exceptionally disappointing and discouraging.

“The average occupancy for a holiday let is 232 nights, inclusive of owner bookings, which at first makes it seem like 182 days is a rational approach.

“However, 15 to 20 per cent of holiday lets hover around that 180 nights mark, meaning they could easily be pulled into proposed council tax premiums, if they simply have a couple of cancellations, the weather is unseasonably bad or illness prevents them from hosting. In line with our own research, this could see a number of holiday let owners exit the market, which would have a detrimental impact on the local economy and the Welsh tourism sector.”

Bond continues: “It’s not just the impact on holiday lets themselves that needs to be considered - the impact on the wider community also should be taken into account. These professionally operated properties generate year-round guests, who will eat in local restaurants, purchase from local shops, visit attractions in the area and drink at local cafes/pubs several times a week, contributing to the local economy.

“We very much welcome the tax premiums on empty second homes, which have little benefit to the local economies. The increased taxation not only draws a line between these second properties and holiday let properties, which operate as small businesses, but also encourages owners to professionally market properties for holiday lettings. The element that needs to be considered is the minimum requirement and exemptions should unforeseen circumstances arise, in line with industry performance and average booking figures.”