Government’s second homes policy doesn’t address the housing crisis

Government’s second homes policy doesn’t address the housing crisis

0:06 AM, 14th November 2024, About 2 hours ago

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The government’s recent decision to increase stamp duty on second homes has been slammed for not addressing the UK’s housing crisis.

SpareRoom, a room rental site, argues that the policy fails to address why there is a shortage of rental properties.

It says the government is making a mistake by conflating all non-primary residences under the umbrella term ‘second homes’.

That label includes long-term rental properties, holiday homes and short-term lets but that doesn’t acknowledge the different roles the properties play in the housing market.

Holiday properties and short term lets

The firm’s communications director, Matt Hutchinson, said: “We need a tax system that prioritises genuine homes – whether owner occupied or rented – and distinguishes them from holiday properties and short term lets.

“A rental property let on a residential basis and in use year-round contributes to the overall supply of residential accommodation, which is something we desperately need right now.

“Holiday homes, whether privately owned and used or rented out as holiday lets, don’t.”

He adds: “What’s more, they stand a higher chance of being empty for part of the year.”

Encouraging long-term rental properties

Instead, the government should focus on encouraging long-term rental properties to remain available and addressing the housing shortage, rather than penalising properties that provide accommodation.

Mr Hutchinson explains: “Instead of a blanket increase in stamp duty, we need a tax system that recognises the vital difference between properties that serve as permanent homes and those that are used for short-term or occasional stays.

“Holiday homes should be treated separately from rental homes, as they have a very different impact on the housing market.”

He says there is no suggestion that holiday homes should be eliminated, but holiday properties should face additional tax burdens to reflect their limited role in addressing the housing crisis.


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