Tourism Alliance urges halt to short-term lets regime abolition

The Tourism Alliance is backing a campaign against the government’s “hasty plan” to abolish tax relief on holiday lets announced in the Budget.

The Alliance has joined the Professional Association of Self Caterers (PASC) in urging the government to postpone abolition of the Furnished Holiday Lettings tax regime from April next year.

PASC has organised a petition and mass emails to MPs. The Tourism Alliance, which includes Abta, UKhospitality and PASC among its 75 members, said: “The proposed abolition will have a direct effect on many accommodation owners and operators.

“But it will also have an impact on the wider tourism sector if – as supporters of abolition of the scheme expect – it will reduce the number of holiday lets in key tourism destinations.”

The Tourism Alliance and PASC want a planned national registration scheme for holiday lets introduced before any change to, or abolition of, the scheme.

Chancellor Jeremy Hunt confirmed abolition of the tax relief to second homeowners renting properties to holidaymakers in the Budget on March 6.

Hunt said the move followed “tenacious representation” from the MPs for St Austell and Newquay, North Devon, Torbay, Truro and Falmouth, and Westminster.

He told MPs: “I’m concerned this tax regime is creating a distortion meaning there are not enough properties available for long-term rental by local people.”

However, this was disputed by Sykes Holiday Cottages’ head of regulation and policy Ben Edgar-Spier who claimed: “Holiday let owners have been unfairly scapegoated.

“Short term rentals are the economic lifeblood of many parts of the UK, driving spending and supporting local businesses. It’s illogical to target short-term let businesses over those with empty second homes which contribute nothing to local economies.”

Edgar-Spier suggested: “There are potentially hundreds of factors at play when it comes to housing and rental prices, with nearly 1.4 million empty homes in England – 16 times the number of holiday lets.”

“Putting pressure on holiday let owners will not solve the housing crisis but risks impacting businesses that support tourism.”

The government announced new controls on short-term lets in England from this summer in February and confirmed plans for a mandatory national registration scheme.

The new controls mean councils will have the power to require planning permission for properties to be turned into short-term lets, although the rules will not apply to people renting out their main home for less than 90 nights a year.

However, only new short-term lets will require planning permission, with existing ones automatically reclassified.

The government claimed the changes would boost the availability of properties to buy or rent where there are a high number of short-term lets and said the new national register would give councils information on short-term lets in their area.

The changes were welcomed by Airbnb, which said hosts “will benefit from clear rules and local authorities will get access to the information they need to assess and manage housing impacts”.

But campaign group Generation Rent, also known as the National Private Tenants Organisation, said: “Proposals to allow existing short term lets to automatically continue risks shutting the stable door once the horse has bolted.”

The number of holiday lets in England rose by 40% between 2018 and 2021, according to existing council figures.

The government consulted on a registration scheme for short-term lets in England last year and noted this “demonstrated support for a mandatory registration scheme”.

It has promised “further detail on how the scheme will work later in the year”.

The Office for National Statistics (ONS) published data on short-term lets in the UK rented through Airbnb, Booking.com and Expedia for this time earlier this month.

It revealed there were 2.8 million stays booked through these platforms for July to September last year, amounting to 28.9 million nights. UK domestic visitors accounted for almost 64% of the total or 18.4 million nights and international visitors 10.5 million.

Cornwall was the busiest local administration with 1.6 million guest nights, ahead of Edinburgh on 1.157 million and Westminster (872,000). Edinburgh, Westminster and Kensington and Chelsea were most popular for lets by international visitors, and Cornwall, Gwynedd and Edinburgh most popular for domestic.

Data from European agency Eurostat suggests the UK is the fourth-largest short-let market in Europe behind France, Spain and Italy. However, the Spanish market is double the size of the UK’s and French more than double at 65 million guest nights in the same period.

Seven of the top-20 regions for short-let stays in Europe were in Spain and five each in France and Italy.

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