Rental Sector Tax Grab - leading agency boss speaks out

A figure in one of the country’s highest profile lettings companies has hit out at a government proposal to penalise the holiday lettings sector.

The government floated the idea at the weekend, suggesting that Chancellor Jeremy Hunt would use tomorrow’s Budget to remove tax concessions for those who let furnished holiday and short let properties.

This would give Hunt £300m for pre-election giveaways.

Now Ben Edgar Spier, head of regulation and policy at Sykes Holiday Cottages, says: “If the news contained in the leak is accurate, this will represent another example of holiday let owners being unfairly scapegoated in the guise of controlling rising house prices and availability.

“There are many factors affecting housing supply and prices above and beyond short-term letting. Just last week, a CMA report on the housebuilding market showed that a failure to deal with the UK’s slow building rates over successive decades has significantly impacted the housing market. Only 178,010 homes were completed across England last year when Government targets have been 300,000.

“A report we commissioned by Oxford Economics found that short term lets contributed over £27.7 billion to the UK economy in 2021 and supported over 500,000 jobs amongst local residents. It’s illogical to penalise short-term let businesses over those with empty second homes when you consider the benefits tourism brings to local economies throughout the UK.

“There are nearly 1.4 million vacant homes in England, according to ONS figures – nearly 16 times more than holiday lets – and more than 100,000 in Wales. It makes more sense to tax these vacant buildings or underused second homes, which both contribute very little. A tax such as his would also encourage people to either sell empty second homes or let them.

“Holiday let owners are already under pressure from high mortgage rates and energy prices after the difficulties of Covid and in a time of price sensitivity for visitors. Squeezing them will not solve the housing crisis but will stifle the very businesses that support tourism spend and employment in communities across the country.”