Planning matters blog

When is a house not a (holiday) home? Opportunities for purpose-built/provided holiday accommodation

Stephanie Irvine & Helen Ashby-Ridgway 29 Feb 2024

Last Summer, Gwynedd Council consulted on proposals to implement an Article 4 Direction that would withdraw permitted development rights that would usually allow the change of use between primary homes, second homes and short-term lets. This consultation followed changes to planning legislation in Wales resulting in new and amended use classes^[1] that differentiate between different uses of dwellinghouses:

The use of Article 4 Directions is one of a range of measures being introduced in Wales to manage the number of second homes and short-term holiday lets, including:

The ability of local authorities to set council tax premiums on second homes of up to 300% from April 2023^[2];
Changes to the latest version of Planning Policy Wales (PPW) (February 2024) which now requires local authorities to consider localised issues “such as the prevalence of second homes” when setting housing requirements and states that local authorities can introduce a cap or ceiling on the number of second homes or short-term lets if this is justified by local evidence[3]; and,
A proposed registration and licensing scheme for visitor accommodation: legislation now expected to be introduced to the Senedd before the end of 2024^[4].

The underlying issues are not unique to Wales. Last week’s announcement from the Department for Levelling Up, Housing and Communities, Department for Culture, Media and Sport, Julia Lopez MP, and The Rt Hon Michael Gove MP indicates that England is now following a similar path in seeking to control the number of homes used as short-term lets.

Impacts of second homes and short-term holiday lets

The Welsh Government is responding to the pressures that concentrations of second homes and short-term lets can bring to local communities in some areas and its concerns regarding the supply and affordability of housing. In Lichfields’ Insight Focus: Sun, Sea, Sand and Article 4 Directions, we explore a number of assumptions regarding the impacts of second homes and short-term holiday lets in Wales to understand whether Article 4 Directions are part of the solution and what the implications might be for one of Wales’ most important industries – tourism.

Our analysis highlights that localised issues relating to house prices and the Welsh language need to be considered alongside broader factors such as housing market trends and demographic changes, and not attributed solely to the presence of second homes and holiday lets. It also highlights the wider problem of unmet need for general housing across Wales. The Welsh Government estimates that 110,000 dwellings are needed across Wales between 2019 and 2039^[5]^,[6], whilst Lichfields has already put a spotlight on why this does not reflect the actual, higher, level of housing need.

Our latest Insight Focus also calls attention to the role of the tourism industry in the local communities, including the provision of second homes and short-term lets, in providing vital socio-economic benefits by generating employment and attracting visitor expenditure for these same communities. Attracting overnight visitors to Wales is of key importance, particularly in the context of international visitors having decreased in recent years. The number of international visitors to Wales was 33% lower in 2022 than pre-pandemic (in 2019)[7].

The potential consequences of measures to restrict the number of second homes and short-term lets are far from certain. However, an insufficient provision of these types of accommodation could result in limiting the number of visitors to an area, and in turn the loss of social and economic benefits. This should be a particular concern for many areas of Wales, where tourism accounts for a large proportion of the local economy.

In 2022, the tourism industry accounted for 8.7% of all employment and was the fourth largest sector across Wales^[8]. Even higher levels of employment in the tourism industry were seen in several local authority areas, including Conwy (16.3%), Pembrokeshire (15.6%), Anglesey (14.6%), Ceredigion (13.3%) and Gwynedd (12.9%). Understanding the need to balance the pressures for communities, the provision of additional purpose-built/provided holiday accommodation could help to fill the gap in tourist accommodation resulting from the inevitable decline in conversions of primary homes into second homes and short-term lets. This could help to avoid unintended consequences for authorities facing pressures and also create new opportunities to support the tourism sector elsewhere in Wales.

Purpose-built/provided holiday accommodation

Purpose-built/provided holiday accommodation can include a wide range of options, from glamping pods to luxury resorts, and from holiday parks with static caravans to boutique hotels. These types of accommodation are restricted to holiday use only by way of planning conditions, legal agreements and/or licences. This means that they cannot be used for permanent occupation.

Many of the concerns raised in relation to the impacts of second homes and short-term lets on the housing market (discussed in our Insight Focus) do not apply to purpose-built/provided holiday accommodation. In particular, these types of accommodation do not have any impact on the local housing market or the ability of local people to compete in that market and does not reduce the number of permanent residents living in a community. Tourist accommodation also generates revenue through business rates[9], with visitors having a significantly lower draw on Council services than residents[10].

From our own work in Wales, we know there are fantastic examples of purpose-built/provided holiday accommodation supporting prosperity within local communities by attracting private sector investment, supporting direct jobs with holiday accommodation providers, generating visitor expenditure and supporting local businesses, thereby creating indirect and induced benefits in the supply chain. These socio-economic benefits can enable growth in accordance with Chapter 5 of PPW, which recognises tourism as an economic land use which is vital to prosperity in many parts of Wales. They can also help to diversify rural economies, reflecting PPW (Section 5.5) and Future Wales (2021) (Policies 4 and 5).

Need for support for holiday accommodation

With these potential risks and benefits in mind, local authorities should ensure that any measures to restrict the use of general housing for holiday accommodation are based on robust, locally-specific evidence. Furthermore, these measures should be accompanied by positive tourism policies to support the provision of purpose-built/provided holiday accommodation to cover the shortfall in visitor accommodation if there is a decline in conversions of primary homes into holiday lets.

The plan-making process offers opportunities for the tourist industry to fully engage and provide evidence to support the development of supportive policy frameworks for new holiday accommodation proposals.

At Lichfields, we work proactively on behalf of our clients to engage in the plan-making process and, drawing on our Economics expertise, can provide tailored analysis to assess the socio-economic impacts, needs and growth potential of the visitor economy in a given location. Please contact us if you would like to discuss any planning matters in relation to your tourism projects.

Image credit: Anthony on Unsplash

[1] Written statement: Changes to planning legislation and policy for second homes and short-term lets (September 2022): https://www.gov.wales/written-statement-changes-planning-legislation-and-policy-second-homes-and-short-term-lets

[2] Council tax on empty and second homes: https://www.gov.wales/council-tax-empty-and-second-homes-html

[3] Planning Policy Wales (edition 12, February 2024), para 4.2.5: https://www.gov.wales/sites/default/files/publications/2024-02/planning-policy-wales-edition-12_1.pdf

[4] Plans unveiled for statutory registration and licensing scheme for visitor accommodation in Wales (9 January 2024): https://www.gov.wales/plans-unveiled-statutory-registration-and-licensing-scheme-visitor-accommodation-wales

[5] Future Wales The National Plan 2040 (2021): https://www.gov.wales/sites/default/files/publications/2021-02/future-wales-the-national-plan-2040.pdf

[6] An annual increase of 7.5%

[7] Welsh Government, International inbound visits and spend to Wales (February 2024): https://www.gov.wales/international-inbound-visits-and-spend-wales-html#:~:text=IPS%20data%20revealed%20that%20in,%25%20lower%20than%20pre%2Dpandemic.

[8] ONS Business Register and Employment Survey (2022) – accommodation and food sector (as a proxy for the tourism sector).

[9] In Wales, business rates are collected by local authorities and paid into a national ‘pool’ administered by the Welsh Government. They are then redistributed to Welsh local authorities and Police and Crime Commissioners as part of the annual Local Government Settlement and Police Settlement. Source: https://senedd.wales/media/4i3dmvrd/18-036-web-english.pdf

[10] Typically, the largest elements of local authority budgets are education, social services and housing services. In 2023-24, these services constituted 68.8% of local authority budgets (Source: https://www.gov.wales/sites/default/files/statistics-and-research/2023-06/local-authority-revenue-budget-and-capital-forecast-april-2023-march-2024-080.pdf). Visitors would only make minor use of other Council services, including policing, local environment services, roads and transport, libraries, culture, heritage and recreation, fire and planning and development.

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2024, a General Election Year

Ross Raftery 28 Feb 2024

2024 is - almost certainly - a General Election (GE) year[i]. As it has been in the two previous elections, housing is widely expected to be one of the key battle grounds for votes. Indeed, in a higher-interest rate environment and the post-pandemic cost of living crisis, it is likely to be an even more significant concern for voters than it has been previously.

In this new series, we will distil what we know about the upcoming GE and its potential influence on future policy for the delivery of homes. We will track what the main political parties are saying at key stages in the build up to the election, including analysing their manifestos and key announcements; reviewing the situation before and immediately after the GE; and then once the dust has settled and the cabinet is announced.

When will the GE happen?

This is in the hands of one person - Prime Minister Rishi Sunak – and while he has indicated that it is his ‘working assumption’ that the election will be in the second half of 2024, we approach this question with an open mind.

To set the context, the latest YouGov voting intention figures[ii] reveal a convincing lead for Labour (44%) over the Conservatives (23%). This trend follows a shift in balance in December 2021, which became more pronounced in September 2022 and has remained consistent since.

The by-elections in Wellingborough and Kingswood last week, have further demonstrated a significant shift of Conservative voters to Labour and other parties including Reform. With Labour achieving a gain of 19.5% in Wellingborough to the Conservative’s loss of 37.6%, and an 11.5% gain for Labour in Kingswood, compared to the Conservative’s 21.3% loss.

Sunak will want to see this gap narrow before calling an election, and so the timing for an election could depend on events that rebalance these polls, if there are circumstances where it looks that favour for Labour begins to wane. Other key considerations for the Prime Minister will include performance against his five priorities:

Growing the economy;
Halving inflation;
Reduce national debt;
Stopping small boat immigration; and,
Cutting NHS waiting lists.

For the practical reasons involved in holding a GE, it is unlikely to be held in either summer 2024 or late December 2024/January 2025. In particular, leaving the GE to January would mean election campaigning over Christmas, which is unlikely to be popular for either candidates or the electorate, and the dark winter nights in late January could see a lower turnout.

This leaves two broad schools of thought:

The ‘go early’ camp (now until late June, but most likely May 2024): Many local and mayoral elections (including in London) are already scheduled to be held on 2 May, so this approach would be both financially more efficient and follow a trend for previous GE’s. Coinciding local and GE results means a single set of results, avoiding the risk of poor local election results impacting on a subsequent GE. This could also be well-timed to follow the Spring budget (6 March). However, this would give little time for the opinion polls to change, or for Sunak to demonstrate the Government’s performance against its commitments.

The ‘go late’ camp (late September to mid-December): Assuming that the GE isn’t left until January 2025, the logic for an autumn 2024 election would be the additional time that Sunak has to narrow the gap to Labour on the issues set out above, or even see a reversal of polling fortunes from currently unforeseen factors. In this scenario, there are also considerations relating to clashes with the US election (5 November), which Whitehall is understood to have warned cabinet ministers against due to the associated potential security risks, and how a GE might factor into Party conference season in October. If November is avoided due to simultaneous elections in two of the Five Eyes nations, it could indicate an early election within this window.

What’s at stake?

The housing crisis facing the country is a matter well covered elsewhere and there is little sign of improvements in housing delivery that will see us achieve the target of 300,000 homes per annum[iii].

Indeed, our colleague, Bethan Haynes’, analysis of the latest ONS projections[iv] provides a further stark reminder of our future housing need. These latest ONS figures project England’s population to reach 63.5m by 2040 and, over the next decade, annual population growth is expected to be higher than any of the previous sets of projections, at 361,000 per year.

The GE and a new government – regardless of colour – could provide a mandate for bold decisions to be taken which step up to the challenge of meeting our housing need. While we will need to continue to track what’s being said by each party, there are already some signs of big moves in this arena.

What’s being said already (about housing)?

We are at an early stage for this analysis – manifestos haven’t been published and campaigning hasn’t yet begun in earnest. However, we’ve reviewed key movements that are already being made for the three main parties.


Position on housing delivery While there isn’t a manifesto for the Conservatives, their live and proposed policies can give an indication of their future strategy for housing. The government still maintains a target of delivering 300,000 new homes per year. However, in NPPF policy changes in December 2023, the ‘standard methodology’ was clarified as an ‘advisory starting-point’, and the need to review Green Belt boundaries in the preparation of a local plan was removed. The implication of both of these policy changes being that achieving the target of 300,000dpa is likely to be even more challenging. The government has subsequently announced further proposed changes to the NPPF that would expect local planning authorities to give significant weight to the benefits of delivering as many homes as possible, and to be flexible in applying policies or guidance on the internal layout of developments especially for proposals on brownfield land.


Position on housing delivery Labour has set ‘five missions’ already; the first of which is to ‘Get Britain building again’ and demonstrates the priority that Labour is giving this topic. It wants to reform planning laws to build 1.5m more houses within the first five years, with first time buyers getting first dibs. This would include reintroducing mandatory housebuilding targets for local authorities.

Position on housing delivery In their Autumn Conference 2023, the Liberal Democrats set out their approach to tackling the housing crisis. They set a target for building 150,000 social homes a year; to build 10 new garden cities; and to expand neighbourhood planning and have more democratic engagement in Local Plans. At the same time, Liberal Democrat members voted against the party’s leadership’s proposal to remove its national housebuilding target of 380,000 homes a year.

While these movements give a helpful indication of the likely direction of the three main parties, the reality depends not just on who is in Number 10, but also the size of any majority or the effect of a potential coalition.

Without a majority, the internal tensions that exist within each party could come to the fore. This has been seen within the current Conservative Government, which has maintained its target of delivering 300,000 new homes a year, even though specific policy changes that appease alternative internal views could be seen to undermine the ability to achieve this target.

These potential internal tensions will be particularly important if there is no landslide win, and the resultant Prime Minister ends up beholden to their backbenches.

Our ‘manifesto pledge’

This series of blogs could be relatively short if the ‘go-early’ camp is correct, or we could continue monitoring this GE-build up well into the winter. While its longevity is out of our control, our pledge is to use this series to monitor housing as a key area of election focus, and seek to interpret what it could mean for the industry.

In doing so – given the scale of the housing crisis facing the country – our only allegiance through this series will be an objective view on what will help deliver the homes we need.

[i] The last possible date for a GE is 28 January 2025, but it is generally considered unlikely to be left until this 11th hour, and in the past century a GE has never been held in January.

[ii] https://yougov.co.uk/politics/articles/48526-voting-intention-con-23-lab-44-30-31-jan-2024

[iii] https://lichfields.uk/blog/2023/december/20/housing-need-cannot-be-ignored-like-an-unwanted-christmas-present

[iv] https://lichfields.uk/blog/2024/january/30/getting-right-back-to-where-we-started-from-what-do-the-latest-record-high-ons-projections-suggest-about-housing-need

[v] https://labour.org.uk/missions/economic-growth/

[vi] https://www.libdems.org.uk/news/article/tackling-housing-crisis

[vii] https://news.sky.com/story/lib-dem-members-reject-party-plan-to-scrap-national-housing-target-12969909