The term ‘hostile environment’ was dreamt up by the Home Office to describe a policy of making migrants lives’ so difficult that they would be minded to pack up and leave the country. But it could equally well have been coined to apply to the government’s policies towards buy-to-let investors.
For years, governments of all colours sat back and did nothing as rampant house price inflation priced many young people out of the market. Then something clicked and George Osborne, together with his successors at No. 11, decided that it was not a good idea to have investors and speculators scoop up properties by the armful, outbidding aspirant owner-occupiers.
Without places to stay, people are not going to travel 200 miles to spend money in tourist attractions, restaurants and shops
But rather than do something positive like tackle delays in the planning system, or reducing regulation and levies on house-builders, ministers trained their eyes on investors, with a mind to make their lives a misery through fiscal and regulatory hell.
Since then we have had an extra 3 per cent stamp duty, so that buyers of second properties worth more than £250,000 pay a marginal rate of 8 per cent. We have had the rules changed to stop landlords setting their full interest repayments against tax; we have had landlords warned that they will be banned from letting out properties from 2028 unless they have an Energy Performance Certificate rating of at least ‘C’ – with huge fines for disobeying.
Now, Michael Gove wants to force property owners to seek planning permission before using their homes as holiday lets. This will mean having to incur application fees of hundreds of pounds even if permission is granted.
People need homes to live in, but they also want places to go on holiday. Holiday lets may annoy some local residents, but they are also the economic lifeblood of many popular areas. Without places to stay, people are not going to travel 200 miles to spend money in tourist attractions, restaurants and shops.
True, if a town or village becomes dominated by holiday lets and second homes, pricing out permanent residents, it can damage the community. Yet Gove’s initiative will do nothing to prevent the latter phenomenon: properties bought up by the wealthy to be used for their personal occupation a few weekends of the year and left empty the rest of the time. Second homes left unoccupied for long periods damage the social structure of a town or village while bringing minimal benefit to the local economy (save for people who sell and maintain alarm systems).
Indeed, all Gove will succeed in doing is to switch some holiday lets to pure second homes as their owners decide it is too much bother to seek planning permission. Depending on whether an exemption is granted for occasional holiday lets through Airbnb and the like (such a rule has been mooted), it could also harm the many local people who earn a little money on the side by letting out their homes while they themselves go off on holiday.
This occasional holiday letting makes for a tremendously efficient use of property. It allows the availability of holiday lets to increase during the holiday season, making use of homes which would otherwise be empty. But of course it doesn’t suit the big guys of the holiday-letting trade: the caravan and holiday park owners who would really like the market all to themselves. A requirement to seek planning permission will cause little problem for them: if their properties are purpose-built, they will already have such permission.
Depressingly, this is how so much legislation comes to exist: it is sewn up between ministers and lobbyists acting for big business who want fussy rules to make life hell for their smaller competitors. We voted to leave the EU in the hope of easing unnecessary regulations on business. Sadly, the government has taken on the task of generating punishing new regulations of its own.
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