Holiday home data shows a rise in holiday properties since before the pandemic and according to an expert holiday home insurer, some areas are turning into ghost towns, with homes left unoccupied and on the market for sale.
With a downturn in bookings, council tax doubling in some areas, the furnished holiday lets tax relief being withdrawn and the expected rise in capital gains tax has led to a surge in holiday homes being put up for sale.
Holiday home insurer Schofields has analysed the latest data from ONS revealing those areas that are significantly rising but also showing those towns that are becoming ‘ghost towns’.
The UK Government has unveiled increased taxes for second homes aimed at tackling the growing issue of the lack of affordable homes across the country.
These policies aim to encourage second homeowners to either make greater use of their properties, release them back into the housing market or switch to long-term lets. As a result, many second homeowners are choosing to sell their holiday homes to avoid the higher taxes and cash in on the rise in house prices since the pandemic. This trend is particularly evident in coastal towns and rural villages, where a significant number of properties are being withdrawn from the holiday rental market and listed for sale.
Areas such as Cornwall, the Lake District, and parts of North Wales have seen significant rises in property prices, largely driven by the demand for holiday homes and investment properties. While tourism has boosted local economies during peak seasons, many towns see a drop in population during the off-season.
Places like Salcombe in Devon and Whitby in North Yorkshire are at risk of becoming 'ghost towns' outside of the tourist months. The government recognises the need to balance the benefits of tourism with the sustainability of year-round communities.
The areas becoming ghost towns
Salcombe, Devon - Salcombe has become a hotspot for holiday homes, leading to inflated property prices that residents struggle to afford. The town experiences long periods of unoccupancy, particularly outside of peak tourist seasons, resulting in a declining year-round population.
Robin Hood's Bay, North Yorkshire - Known for its picturesque views, Robin Hood’s Bay attracts many second-home buyers. The council is imposing a 100% council tax premium on second homes in the area.
Whitby, North Yorkshire - Whitby’s popularity as a tourist destination has made it a prime location for second homes. However, many homes are left unoccupied for large portions of the year. The local council has taken steps to address the problem by banning new-build second homes and doubling the council tax for existing ones.
Falmouth, Cornwall - With its scenic coastline and strong tourist appeal, Falmouth has seen a sharp rise in second-home ownership. However, to combat unoccupied homes the local authority will double the council tax for second homeowners.
Pembrokeshire, Wales - Pembrokeshire is home to many holiday properties that are vacant for much of the year. Second homeowners are facing up to a 300 per cent increase in council tax, an effort to discourage property hoarding and make more housing available for residents.
Gwynedd, Wales - Gwynedd’s picturesque landscapes have made it a popular destination for second-home owners. However, surrounding villages are facing significant challenges due to second home ownership with many homes vacant for much of the year. Surrounding villages struggle with inflated property prices, seasonal population swings, and a lack of affordable housing, prompting the Gwynedd Council to consider higher taxes and restrictions to address the crisis.
New regulations in England require holiday lets to be rented out for a minimum of 70 days per year and be available for at least 140 days. In Wales, owners must let their properties for at least 182 days a year and make them available to rent for 252 days. This policy aims to encourage more consistent occupancy and discourage properties from remaining to be a ghost town for most of the year.
By focusing on affordable housing development, communities can ensure that locals have access to suitable accommodation, thereby strengthening community ties and promoting social stability.
As holiday homes rise in popularity, countryside and coastal areas in England and Wales are changing. Tourism is a key component of the economies of these regions, but growth should not undermine their unique communities.
Phil Schofield from Schofields Insurance commented: “The tax changes are already impacting the holiday property market, many towns and villages are slowly becoming ‘ghost towns’ as owners sell their holiday lets.”
He concluded: “The holiday letting industry should be supported to help ensure that tourist areas remain vibrant and thriving year-round. However, the recent tax changes, increased costs and a downturn in bookings have led to an oversupply of second homes being put up for sale in some areas.”
