March 11, 2024 11:18 am

Insert Lead Generation
Nikka Sulton

The recent decision by Chancellor Jeremy Hunt to eliminate tax reliefs for furnished holiday lets has sparked disagreement, particularly from the CEO of a short-term lets service. The Budget’s intention is to discourage landlords from opting for short-term holiday lets over long-term housing. However, the CEO asserts that penalizing landlords may not be the most effective solution to address the housing shortage.

In a move to remove incentives for landlords in the short-term holiday rental sector, the government claims that abolishing the Furnished Holiday Lettings tax regime will redirect focus towards providing more long-term housing solutions. Despite these intentions, critics argue that such measures might not address the root causes of the housing shortage and could potentially have unintended consequences.

Charlotte Thursfield, representing the SevenStays short lets platform, highlights concerns about the repercussions of abolishing the current holiday lets tax regime. The decision, she asserts, will compound the existing challenges faced by holiday let owners grappling with elevated mortgage rates and escalating energy prices. This move, she contends, fails to address the fundamental issue in the private rental sector – the scarcity of available housing.

Thursfield argues that the tax breaks, previously provided, made short-term holiday letting an economically viable alternative to long-term rentals. Scrapping these benefits, she believes, will have minimal impact on the supply of long-term rental properties in the UK. Instead, it adds financial strain to holiday let owners without significantly alleviating the broader housing supply crisis.

In essence, the criticism centres on the assertion that penalizing landlords through changes in tax regulations may not effectively contribute to resolving the housing shortage. Thursfield suggests that a more nuanced approach is required to address the complex challenges faced by both landlords and tenants in the evolving landscape of the property rental market.

Addressing concerns about property shortages in popular holiday destinations like Cornwall, it’s noted that 5.7% of properties in the South West are classified as vacant, impacting local supply.

The government’s failure to address 1.4 million vacant properties nationwide exacerbates the challenges for holiday let owners. Tightening tax on holiday homes and proposed measures to regulate short lets by Jeremy Hunt and Housing Secretary Michael Gove might inadvertently lead landlords to exit the market.

Despite this, the economic contribution of holiday lets to local economies, especially through tourism, is highlighted, suggesting a need for a balanced approach to housing policies.

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. 



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