Climate Change Minister Julie James has this week (Tuesday, March 12) delivered a statement on the Welsh Government’s approach to tackling issues caused by second home ownership that she described as being ‘unparalleled in a UK context’.
Addressing the large number of second homes and short-term lets in many communities is one of the commitments outlined in the Welsh Government’s Programme for Government and the Co-operation Agreement with Plaid Cymru.
To achieve this, a range of action has been taken to help manage future numbers of second homes and short-term lets.
From April 2023, local authorities have had the powers to introduce higher discretionary council tax premiums on second homes and long-term empty properties – up to 300%.
From April this year, 18 will be applying premiums on one or both of these types of properties.
Several local authorities have also indicated they intend to increase the percentage charged year-on-year over a three-year period, up to the new maximum, particularly for long-term empty properties.
Support has also been put in place for struggling homeowners.
Addressing the Senedd, Climate Change Minister Julie James said: “We are acutely conscious of the challenge in finding affordable property, but also of being able to afford to remain in it.
“As part of the Co-operation Agreement, we considered gaps in the mortgage market and our current support for homeownership.
“This work will help all parts of Wales better understand the implications and processes involved in taking forward this groundbreaking work.”
An immediate priority was considering a gap in the market for those struggling to afford mortgage payments and at serious risk of losing their home due to the cost-of-living crisis.
In that context, the Help to Stay Wales scheme was developed and launched in November 2023, with up to £40m available over two years to help keep people and families in their homes.
Last year, the £50m Empty Homes Grant scheme was also introduced, helping bring up to 2,000 long-term empty homes back into occupation.
The Welsh Government also protected the £25m budget for 2024/25 and deferred £19m of the 2023-24 budget to 2025-26 to maximise the scheme’s impact.
The Minister also provided an update on the tailored Homebuy offer, working with Cyngor Gwynedd and Grwp Cynefin as part of the Dwyfor second homes and affordability pilot.
The HomeBuy scheme in the pilot is already proving to be a success with homeownership already becoming a reality for 13 families.
This is a significant increase on the one completion in the five years preceding the introduction of the pilot.
The pilot also actively supports community-led housing capacity and works with existing groups, as well as encouraging new ones to form.
Designated Member, Sian Gwenllian, said: “Through the Co-operation Agreement we are taking action to help people live in their local communities, addressing the high numbers of second homes and short-term lets. Unaffordable housing must be addressed if everyone is to have the ability to live and work in the communities in which they grew up.
“We have introduced a range of measures that will make a real difference, from new powers on how much council tax can be levied on second homes, to changes to the planning system. We will continue to work together to tackle a problem that is evident across Wales.”
The Welsh Government has introduced ground-breaking changes to the planning framework. Last summer, Cyngor Gwynedd consulted broadly on a proposed direction which would mean that those wishing to change residential properties to either second homes or short-term lets would, in future, need planning permission to do so.
More than 4,000 responses were received and will now be analysed to develop a Consultation Report.
Cyngor Gwynedd is committed to sharing ongoing learning throughout this process.
Eryri National Park will also consult on this direction from May.
