South West home affordability at breaking point

Rental cottage to let sign displayed in house window

Home affordability is under more strain, as an analysis of figures released by the government reveals the number of second homes in England undergoing change of use to become holiday lets.

The 67,578 homes reclassified as holiday lets since the Covid pandemic began represents an increase of 20% more holiday homes that now trade as businesses.

In spring 2020, holiday homes received £552 million of government support in grants – money provided to support non-essential sectors such as retail, hospitality, leisure, personal care and accommodation. Further top-up grants of £257 million were made available in January 2021.

The popularity of holidays in the UK has grown, largely due to restrictions on foreign travel, and this has had the knock on effect of exacerbated the housing problems that already affect people living in holiday hotspots.

The business of changing the use of the property can provide huge income streams for the owners, as well as saving them money in taxes. Landlords can earn substantially more from their property by focusing on holiday lets rather than providing homes to the rental market.

Even before the pandemic, those living in areas that are traditional holiday destinations around the UK faced severe difficulties in finding housing, due to the already high cost of homes in these areas. Many particularly younger people rely on renting a home where they were brought up and have family, and where they work, but even this is becoming an issue as other factors exacerbate the problem.

Home affordability isn’t the only problem. A high proportion of renters are finding it increasingly difficult to even find a home, let alone pay for it, while others have simply been given notice of eviction and face leaving their homes and jobs to live in cheaper areas of the country.

In Devon and Cornwall, around 4,000 homes changed use over the Covid period and other areas such as these have seen huge numbers of additional visitors this year, largely as a result of the pandemic.

The shortage of homes on the market over recent months has driven demand for homes with a resultant increase in property prices. In the South West, this has been further exacerbated by ‘urban flight’, as people move out of cities to live in larger homes and places with more outdoor space.