LINKING the issue of holiday homes to the spiraling cost of housing in rural Wales is a “grave error” by the Welsh Government - according to the Conservative opposition. 

The Government will today outline its plans to address the issue of second home ownership – which is fueling the rising cost of homes in holiday hotspots, in the Senedd today, though Plaid Cymru has labelled the proposals “weak” and insufficient. 

The Welsh Government has said it intends to introduce a legal register of holiday homes and will, this summer, select an area to run a pilot of new housing policies to address the impact of second home ownership.

Climate change minister Julie James, who is responsible for housing, said the  Government wants to work with other parties to tackle the issue, which has come to the forefront with a series of protests recently in north west Wales over house prices that are beyond the reach of local people. 

Figures released by the Halifax bank earlier this year showed the average deposit needed by a first-time buyer in Wales is £6,634 - a 25 per cent increase on the previous year and the largest such rise of anywhere in the UK. 

However Conservative shadow Janet Finch-Saunders said the Government is taking the wrong approach on addressing the issue of housing affordability. 

She said: “There is no denying that the continuing rise of house prices mean people, especially younger generations, can no longer afford to live in the communities they have grown up in. However, the minister has made a grave error by linking this to second homes.” 

Plaid Cymru’s housing spokesperson Mabon ap Gwynfor MS said it he was underwhelmed at the Government’s pre-announcement of its action plan. 

The Dwyfor Meirionnydd member said: “This so-called 'ambitious approach' to tackle the second homes housing crisis is an exercise in kicking the problem into the long grass without taking the necessary urgent action to deal with the crisis facing our communities.  

 “These weak measures will not be nearly enough to truly get to grips with a housing emergency that is fast engulfing our communities at an alarming rate. 

“What our communities need is urgent action before it’s too late - not painfully long-drawn out consultations or half-hearted trials. 

Actions Plaid Cymru wants to see include using the planning system to place a cap on holiday homes, meaning only a limited number of properties in defined area could be used for holiday accommodation, and a plan to bring those properties used as holiday homes into community ownership. 

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It also said the Welsh Government -controlled Land Transaction Tax, paid whe homes above a certain value are sold, should be trebled on second homes, and that a loophole whereby homeowners can designate second homes as holiday accommodation, making them subject to business rates rather than council tax, should be closed. 

Some property owners have responded to new powers to charge up to 100 per cent council tax on second homes by designating them as holiday accommodation, which is instead subject to business rates, and are below the threshold at which rates must be paid. 

The plan announced by climate change minister Julie James is short on detail but the Welsh Government has said as well as providing support on the availability and affordability of homes it will look at planning rules as well as the role of national and local taxation in addressing the issue. 

Swansea University’s Dr Simon Brooks compiled a report on the impact of holiday homes for the Government which recommended changes to planning laws to allow councils greater discretion on allowing houses to be changed into holiday homes, as well as changes to the tax system.   

James said the Gvernment is taking forward the recommendations made by Dr Brooks. 

However Conservative Finch-Saunders said that report shouldn’t be used to justify action on second home ownership. 

She said: “The report by Dr Simon Brooks made important points, including that there is little evidence that second homes are the main cause of high house prices, as opposed to buyers moving to reside there permanently. 

“It is clear that in many communities in North and West Wales local people are unable to compete in the housing market against buyers from outside the community.” 

The Conservative said the government should reintroduce the 'right to buy' legislation,  abolished in Wales in 2019, which allowed council tenants to purchase their homes.

Sheadded that it should be reintroduced in communities facing a housing crisis, and proceeds could be reinvested in more social housing that couldn’t be sold on the open market for at least 10 years. 

She said the proposals announced would only increase red tape and any tax changes should be carefully considered:

“Any increase to land transaction tax could create a crisis for the rental sector, which would be a disaster for communities like Bangor and Caernarfon; and that the trialling of the pilot in a specific location could simply displace the problem to other areas.” 

Dyfrig Siencyn, leader of Gwynedd council, which is home to some of the areas with the highest priced property compared to local incomes, also said the government’s actions fall short of what is needed. 

The Plaid Cymru councillor said: “Consultations and pilot schemes will not assist young people keen to get onto the housing ladder this year, it is therefore exasperating to see that no direct immediate action will be made to support people now. Further delays on this issue is affecting our communities each and every day.” 

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