Increasing tax, introducing planning permission and licences are among a raft of measures being introduced in a bid to tackle people being priced out of areas by second home owners.
First Minister Mark Drakeford and leader of Plaid Cymru Adam Price set out the next steps in a programme of actions to support people to afford a home, in a joint press conference on Monday (July 4).
The Co-operation Agreement between the Welsh Government and Plaid Cymru includes a commitment to tackle the issue of second homes affecting many communities in Wales.
First Minister Mark Drakeford said: "We are today setting out the next steps in a radical programme to ensure everyone has the opportunity to afford to live in their local community – whether that’s buying or renting a home.
“We have a shared ambition for Wales to be a nation of thriving communities – a country where people do not have to leave to find good and rewarding work and a country which people want to come to visit and to live.
“Tourism is vital to our economy but having too many holiday properties and second homes, which are empty for much of the year, does not make for healthy local communities and prices people out of the local housing market.
“There is no single, simple solution to these issues. Any action we take must be fair. We do not want to create any unintended consequences, which could destabilise the wider housing market or make it harder for people to rent or buy.”
The package of measures includes:
Changes to planning regulations by the end of the summer, which will see three new planning use classes – a primary home, a second home and short-term holiday accommodation. Local planning authorities, where they have evidence, will be able to make amendments to the planning system to require planning permission for change of use from one class to another. National planning policy will also change to give local authorities the ability to control the number of second homes and holiday lets in any community.
Plans to introduce a statutory licensing scheme for all visitor accommodation, including short-term holiday lets, making it a requirement to obtain a license.
National framework for land transaction tax: local authorities can request increased land transaction tax rates for second homes and holiday lets to be applied in their local area.
The Welsh Government previously introduced a range of measures to address the issue of second homes, including giving councils the discretionary power to increase council tax premiums on second and empty homes and it has changed the rules on holiday lets so owners and operators make a fair contribution to their local communities.
Plaid Cymru Leader Adam Price said: "We are committed to using a range of planning, taxation and property levers to tackle the issue of second and unaffordable homes – and to do so with urgency.
“The package of purposeful measures that have been developed as a result of the constructive cooperation between Plaid Cymru and the Government in this area will, together, begin to address the injustices in our housing system and make a real difference to people and communities right across our nation.
“The aim is to give everyone ‘yr hawl i fyw adra’– the ability to live and work in the communities in which they grew up.”
Systemic problem 'wider than just second homes'
Jeff Smith, Chair of the Cymdeithas yr Iaith's Sustainable Communities group, says planning permission for AirBnBs will make a difference, but that more needs to be done.
He said: "There are significant new powers here to try to prevent more communities in tourist areas from losing their permanent population and we are calling on councils to use the new powers to manage the situation.
"However, the systemic problem in the housing market is much wider than just the issue of second homes and holiday accommodation, and affects communities across Wales.
"The open market favours wealthy people who buy a house in Wales to retire to, commuters and those in a position to benefit from new work patterns. This is just as serious in terms of depriving young, local people of a home in their community.
"The problem is just as serious in the rental sector as well, unreasonable rents are depriving people of rented homes in their communities."
Suzy Davies, Wales Tourism Alliance chair, has accused the Welsh Government of disregarding the "experience, expertise and livelihoods" in the tourism industry with the new measures.
She said: "Proposals reflecting a determination to distinguish between genuine businesses and second homes might be welcome, as would a form of registration which guaranteed quality.
"However, the recent experience over the 182-day occupancy threshold has left businesses disillusioned about the weight Welsh Government gives to their evidence. There is no confidence that proposals will protect their status from being recognised.
"In the absence of detail, it is not clear where the distinctions will be drawn and whether any rules will be applied retrospectively. Further, there is no confidence that money raised through a licensing system would be used to enforce standards."