The chief executive of a short lets service says Chancellor Jeremy Hunt is wrong to think penalising landlords will help solve the housing shortage.

Hunt’s Budget last week abolished the Furnished Holiday Lettings tax regime which gives extra tax reliefs for costs incurred furnishing holiday lets that aren’t available to private rentals. This was done – so the government claims – to remove the incentive for landlords to offer short-term holiday lets rather than longer-term homes. 

Charlotte Thursfield of the SevenStays short lets platform says scrapping the current holiday lets tax regime will simply add yet more pressure to holiday let owners who are already feeling the effects of high mortgage rates and energy prices.

And she insists this will have little impact on the key issue in the private rental sector: lack of supply.

“The tax breaks made short term holiday letting a viable alternative to renting to long term tenants and scrapping these benefits is unlikely to make any noticeable difference to the supply of long-term rental properties in the UK” she says.

“Whilst we understand concerns from locals looking to rent properties in coastal holiday let hotspots such as Cornwall, 5.7% of properties in the South West alone are classed as vacant (meaning there are no usual residents living there with no indication of it being used for short term lets) and a crackdown on these properties would have had more of an impact on available supply for locals in these areas.

“Likewise, the government’s failure to address the estimated 1.4 million vacant properties across the UK and build enough housing to meet demand has meant that holiday let owners are left feeling the pinch and this may encourage more landlords to leave the market altogether. 

“Ultimately holiday lets help drive a big portion of local economies through tourism and their value has been somewhat overlooked.”

In addition to Jeremy Hunt tightening tax on holiday homes in last week’s Budget, Housing Secretary Michael Gove also wants to clampdown on short lets.

Gove proposes: 

– planning permission will be required for future short-term lets;

– a mandatory national register;

– homeowners can continue to let out their own main or sole home for up to 90 nights a year;

– unspecified proposals which he says “will give communities greater control over future growth”.

Under the clampdown councils will be given greater power to control short-term lets by making them subject to the planning process.