Labour war on holiday lets - UK-wide licensing scheme proposed

I’m with you on this. I have BTL’s, short let’s in City’s and a holiday let in Wales. I have no problem in sensible legislation. There is voluntary legislation now which is just sensible and I abide by all the recommendations and it pays dividends on my returns. I think all property that is not a personally owned PPR should be treated as a proper business and have minimum standard expectations. I even wouldn’t mind paying National Insurance on my profits. But I strenuously object to S24 which is punitive tax that is full of unintended consequences. I’m only in shorts let business of S24 and would happily return some of my properties to BTL if it was removed. If they implemented S24 on short let’s too though I definitely wouldn’t return them. As a business community we cannot expect to reject every proposal put forward. Engagement is the way forward, although sadly the Government doesn’t appear interested in doing that at all … but it takes two to tango! And if it will take a Labour government for that to happen then count me in!

My little cottage is not a luxury to me - it’s my only income after working full time all of my life and very hard too.

I was born in and have lived all of my life in a National Park and there are easy solutions to this issue. It’s not rocket science.
Policy !!!!
Build more houses or change policy on existing building conversions. Stop allowing those who are either anti farming (for food- or just envious of multi generational permanent residents) from sitting on committees and being part of a decision process actively preventing progress on local housing issues.
Current much welcomed proposed policy changes may help to prevent previous policy/individual committee members bias against using existing buildings for conversion.
I know of applications to convert existing family owned buildings into housing for permanent homes for young family members working in the business being turned down in favour of holiday lets. This is outrageous.

Secondly, there is no monitoring or policing of how holiday let’s are used.
When we eventually completed the renovation of my cottage during Covid, I contacted my local council to arrange to pay for the services covered under council tax to be used by my cottage guests, waste disposal, police, fire, roads etc. I was advised that there was nothing to pay until I reached the income threshold. This set me thinking and having a very good knowledge of the holiday accommodation business I know that many so called holiday let’s are still being used by the owners of them as second homes too. It’s a win win situation. They don’t let it all year round saving slots for themselves family and friends and in doing this, don’t reach the threshold for paying their dues so do not pay any rates for any services. I was staggered by this. There is no wonder we permanent residents have some of the highest council tax in the country.

Classify houses as A Permanent paying council tax, B second homes only used by owners and immediate family paying enhanced rates of council tax AND monitored closely and then
C Holiday let’s where a relevant rate council tax for the property is paid and income - expense for the business is assessed and taxed accordingly and the income from this be ringfenced to create more local occupancy housing.
Cutting off my nose to spite my face maybe, but it might help my grandchildren to be able to live close to me and to continue to work in the businesses that are seriously struggling to keep open because of staff shortages because of lack of housing.

Politics of envy - typical of champagne socialists.

That's what I thought Robert.

Simon

Your understanding of the market economy should lead you to conclude that only a small percentage of BTL properties could be successfully moved over to short term rentals due to supply and demand limiting the number required.

The key issue, which is not appreciated by those who advocate punishing long term rental landlords, is that those BTL properties most likely to become successful short term rental properties are the best properties in the most desirable areas, thus reducing the quality of properties remaining in the long term rental market.

Another unintended consequence?

Also a consequence of double taxation on second homes may be the requirement for landlords to pay double council tax during an empty period between tenants. Landlords used to be entitled to a 50% discount, now they pay 100%. That could change to 200% or more.

Ellie - holiday lets and second homes are different but they are both luxuries that prevent some of those properties from being used as a primary residence.
Some holiday lets and second homes will be purpose built holiday accommodation on holiday developments and have got planning restrictions preventing permanent occupation. They are being used for their intended purpose and should be taxed accordingly.
It's the ones that were built as primary homes and are now used as second homes or holiday lets that are really contentious. Taxing them more favourably than other types of housing is just stoking the housing crisis.

Jo

Many second homes are also holiday lets.

I have a really nice second home which I used to let out as a holiday let in summer and also on a six month let over winter. However when the SNP banned fixed term tenancies in December 2017, I stopped the winter longer term rentals and now get off peak rentals that earn me more than the previous winter rentals but the SNP have reduced the availability of winter rentals by their misguided dogma which the Tories and Labour now want to copy

I agree Ellie, but the two occasions I witnessed tenants being evicted were due to turning them into Holiday Lettings, not to become a 2nd home for the family. If a holiday spot were left to regulate themselves then what is stopping everyone with a BTL doing the same, literally everyone? The answer of course is nothing, you would then have not a single dwelling to rent as a permanent home. Taking a wider view, that would be bad for society as a whole.

Hi Jo,

Sorry for the delay in replying. I was out at a property cementing two pipes together.

Second homes are not taxed more favourably. You have to pay 100% council tax and you use far fewer facilities than permanent residents.

Having to pay 100% council tax between tenancies is also quite onerous, because sometimes repairs and improvements can take some time.

You do a good job promoting left-wing policy. It is just not a philosophy that I currently share, as I have been paying 97% of my income in tax - inheritance tax, income tax and council tax.

I have been living on fresh air.

I favour lower taxation and less regulation of property. It has already shifted too far to the Left in my experience.

Hi Simon,

There is a great deal of work attached to holiday letting. I don't think most people would want to be bothered.

I disagree in many cases Ellie - see my comment to Jo Westlakes post - I know that many short term holiday lettings are also used as second homes unmonitored for much of the year keeping the income earned under the threshold for paying for services which shouldn’t happen.

You're years out of date!

The second home discount was removed long ago despite second home owners making much fewer use of local authority services, usually only bin collection and then only for a smaller part of the year.

I bought a derelict cottage which locals ignored for years and used local tradesmen to bring it back up to a high standard.

Since then that property has put hundreds of thousands of revenue into the local economy whereas it was doing no good for anyone before.

There are loads of derelict properties still around but people ignore them because they are not exactly where they want to live.

People want everything handed on a plate but also hate to see others prosper through their own efforts and initiative.

Couldn't agree more Robert.

You sound as though you did a great job renovating that cottage, and have contributed greatly to the local community.

The problem is that second homes deprive 'local' inhabitants the opportunity to live in the communities they were brought up. Likewise turning homes in to holiday lets does the same thing. Most of the 'conquering heroes' live in large towns and cities. I think you are way off the mark with your comments. The challenges not enough homes and we need to deal with it. This initiative is trying to protect rural communities and make house prices affordable in this areas.

I have been talking about council tax and second homes, not holiday lets. I have already said that.

Whether one has the right to complain about the amount of council tax paid, depends on if you think council tax should reflect what you use locally. If you use virtually no council services, then you would legitimately and understandably not be pleased at having to pay thousands of pounds in council tax.

At one point is was thought fair to charge second home owners 50% council tax and to charge landlords 50% council tax between tenancies.

Then it was decided that second home owners should pay 100% council tax and landlords should pay 100% council tax between tenancies.

Now it may be going to be the case that second home owners pay 200% council tax and landlords are expected to pay 200% council tax for empty periods. That is very punitive taxation.

That, in my eyes, is also increasingly left wing local taxation - and could be combined with a policy of compulsory purchase.

I visited the Soviet Union with an open mind when I was younger, and didn't like it one bit there because of the lack of freedoms. Most second homes had been nationalised following the Revolution, and the majority of people had very cramped accommodation - whole families sometimes in one room. However, Communist Party functionaries often had dachas or second homes in the countryside given to them.

Comrades Corbyn and McDonnell still follow their heroes' example with several homes. At least they were thwarted in adding No 10 and No 11 to their portfolios!

Very good Robert! So apt!

We need to build more houses we have a massive increases in population and over the last decade have under built by 200,000 houses a year. Due ti Nimbys red tape etc etc.
4 years ago I was going to move to Estapona in Spain I looked at properties with my sister who lives out there and there were plenty of 5 bed houses with pools and 1/2 acre 5 / 6 minutes from the beach they were around the 175k mark the low prices were down to the opposite problem we have more properties than needed are built. Unfortunately the governments always want to blame buy to let but they are are needed as there is not enough social housing and successive government don't do anything about this apart from forcing developers to make 35% of houses social housing and sell the houses at cost to housing associations and guess what the profit they loose on the these pushes up prices on the ones sold to the public. I get you point on buying a holiday home and it sitting empty for 48 weeks a year seem like a waste.

Very well put and argued, Michael.

I tell you what I'm not everything you want to paint. Some people have scruples and as for your barbed comments it's obvious you want to continue well conintue if you want but this site is meant to be about an honest discussio which it why I'm reporting you.

Sorry Steve but reporting for what ? please explain

Totally agree John. In some areas the former local authority houses, bought at a huge discount by sitting tenants, are sold on by those same former tenants (or their descendants) to the highest bidder. i doubt anyone would take a lower offer from a local but the seller is never vilified, only the buyer.

I know, it is all quite amazing, Michael. I know only too well how much work people like you do and how much tax that landlords pay. I have recently paid over a million pounds to HMRC. I wonder how much tax the activists pay and how much real hard work they ever do. Do they actually contribute anything of any value? They certainly do harm by discouraging investment in property.

It does make you want to get out of the business, as there is no gratitude for all the tax paid and the unpaid work involved.