Baroness Hayman of Ullock:

Moved by Baroness Hayman of Ullock

166: After Clause 75, insert the following new Clause—“Long-term empty dwellings: England - estimatesThe Secretary of State must publish an annual estimate of the number of long-term empty dwellings in England.”Member's explanatory statementThis means that the Secretary of State must publish an annual estimate of how many long-term empty dwellings exist.

My Lords, this group of amendments is important as it directly relates to one of the housing missions. This mission states that more first-time homebuyers will be created in all areas and the number of non-decent rented homes will be reduced by 50%. I agree that good quality housing is the cornerstone of levelling up.

We are in a severe housing crisis, with a lack of supply of affordable homes for young people and little opportunity for families to get on to the property ladder. We therefore must make the best use we can of the properties we already have and maximise opportunities for everybody in every part of the country. There are large numbers of long-term empty houses. The Bill as it stands will not give local authorities sufficient tools to start to get a grip on the situation, so despite the Government saying they want to act, this is a missed opportunity. We have tabled amendments on both long-term empty dwellings and short-term empty lets to see what we can do to help the situation.

My Amendment 166 asks the Secretary of State to publish an annual estimate of exactly how many long-term empty dwellings exist. If we are serious about tackling the issue, we need fully to understand the extent of the problem and which areas are particularly affected.

There are a number of other amendments in my name, and in the names of my noble friends Lady Taylor of Stevenage and Lord Blunkett. My noble friend Lady Taylor has tabled an amendment to increase the maximum premium chargeable on second homes from 100% to 300%. This is a probing amendment to look at where the figure should be set.

My Amendment 171 would allow the Secretary of State to give CCAs the power to restrict short-term holiday lets, and my Amendment 442 probes the question whether local authorities may request that the Secretary of State limit the number of short-term lets in their area. My noble friend Lord Blunkett’s Amendment 172A would ensure that:

“No change in existing council tax levy can be introduced without an independent economic evaluation”.

Clearly, there are complexities relating to second and unused homes. We believe that local authorities need more flexibility over council tax premiums. Surely, it must be for local authorities to decide whether or not they will charge premiums and how much these should be, depending on their local circumstances. This has been a difficult issue for local government, particularly in coastal and rural areas such as Cumbria, where I live. Locals are often priced out of the market as houses are increasingly being turned over to Airbnb or continue to be marketed as second homes. This is putting even more pressure on the housing situation. Communities can be completely hollowed out when this happens. There are villages near where I live in which the majority of houses are second homes or holiday lets. This hollows out local services and infrastructure. We lose bus services, the local school, shops and pubs, all of which are threatened when the number of people living permanently in the community diminishes.

We believe that this Bill is an opportunity to create some innovative solutions, both through the financial regime and the planning system. At the same time, we need to be aware of any unintended consequences. Loopholes exist through which properties can be pushed into the business rates category, thereby avoiding council tax. This happens too often, and we need to ensure that these loopholes are closed.

My Amendment 445 would allow regulations to be introduced to license short-term rental properties. The Labour Party believes that one way to tackle the challenge of second homes in coastal and rural areas is to introduce a licensing system that identifies genuine holiday lets, as opposed to second homes whose owners leave properties empty while pretending to rent them out to holidaymakers.

The Labour Government in Wales are planning to introduce a similar scheme, which would also allow councils to set a limit on the number of second homes. I ask the Minister whether the Government will take account of what is happening in Wales and use it to inform decision-making in England.

My amendment also highlights that some properties are occupied on only a part-time basis; they are let as short-term holiday lets from time to time, perhaps not consistently, or they may be empty for a period and utilised some of the time. The challenge is that this removes opportunities for people who desperately want to buy their own home. This is important, because empty homes, especially if there has been a period of bad weather, which we often have in Cumbria, have an impact on neighbouring properties: gardens become unwieldy and overgrown very quickly, in a matter of months, which can impact on the morale of the neighbourhood and on local house prices. Neglected properties can spread damp to each other, which must be a great concern for the next-door neighbours.

Amendment 168, in the name of my noble friend Lady Taylor of Stevenage, and Amendment 168A, in the name of my noble friend Lord Berkeley, are to do with the lead-in period in the Bill. Amendment 168 would remove the one-year lead-in period and Amendment 168A would change it to nine months. Councils and the Local Government Association have told us that they would want to use this clause at the earliest opportunity. As the Bill currently stands, the Government would have to give a financial year’s notice after the Bill becomes law. If the Bill is not law by 1 April 2023, the earliest the premium could be applied is 1 April 2025. I am sure that is not the Government’s wish, so can the Minister take this back to the department and see if it can be speeded up?

My Amendment 170 would extend the time that people have to make arrangements for their property following a bereavement. This is a particularly difficult time for many. I have been talking about the categorisation of houses and whether they are occupied, but there may be specific reasons why a dwelling is empty. My Amendment 170 would bring compassion to decision-making. It recognises that, when a family has had a bereavement—for example, a parent, but it could be a child or other relative—part of the grieving process is sorting out the house and deciding what to do with it, and whether to sell or to keep it. Homes can hold many memories and it can take time, especially if people live a distance away or have work or caring responsibilities. I am sure that we can all relate to such circumstances; in fact, me and my family and going through this right now. Allowing time for this is important. My amendment suggests two years to enable the process to be done with dignity and without extra pressures on the family. I ask the Minister to consider this very seriously.

The noble Lord, Lord Foster, has a number of amendments—Amendments 228, 263, 264 and 265—on second homes and new classes for holiday rentals. We support these measures. They would give local authorities greater powers to shape local housing markets and strengthen local oversight of changes in accommodation in an area. But we also believe that the Government should be making the tools that exist and are available now much easier to use in the first place.

I am thinking particularly of empty dwelling management orders, which basically allow local authorities to requisition an empty home and turn it into a social rented property. These orders are very valuable because they mean property can be brought back into usage, in effect becoming a social rented property under the control of the local authority for a period of seven years. They are most useful because they act as a warning shot to other landlords, and show what might happen to them if they do not make good use of their properties. The problem here, though, is that the process is lengthy, laborious, expensive and difficult. Will the Minister look carefully at beefing up the existing provisions by ensuring councils can use them more readily, and therefore bring more homes back into use?

Finally, I will comment on Amendment 294, in the name of the noble Lord, Lord Young of Cookham, which seeks to introduce a new use of dwelling-houses, enabling local authorities to maintain the stock of long-term rental properties in an area. We support the noble Lord’s amendment. The CPRE has done research highlighting the surge in the number of homes marketed for Airbnb-style short lets; I have mentioned that previously. When you combine that with the steep decline in the number of new social housing products, it really is adding to a worsening housing crisis. In areas such as mine, you can really see that it is having a huge knock-on effect for rental properties available for businesses wanting to set up in the area, which then struggle to find accommodation for their workers. We know that the Government want to introduce a registration scheme, and this may well be a good step, but we need to see stronger controls and better use of the planning system, so that local priorities are put first and foremost.

I look forward to hearing the debate and to the Minister’s response. I beg to move.

My Lords, Amendment 294, in my name and that of the noble Earl, Lord Devon, would oblige the Secretary of State to make short-term rental properties a distinct use class for planning purposes. The amendment is supported by the Local Government Association, of which I am, exceptionally, not a vice-president, and is based on changes made to secondary legislation in Wales in 2022.

A common theme running through all the amendments is the promotion of the country’s housing stock as a main home, either by raising the council tax on second homes or by using the planning system to control short-term lets. The planning system is not just about whether or not a piece of land is to be developed; it is about the use to which it is then put. For example, you need planning permission to convert a block of flats into a hotel. These use classes have been used to control changes that may be undesirable, and in a few cases they have been relaxed to promote changes between uses.

The Government have clearly recognised that we have now reached the stage where some form of control is needed if we are to maintain a proper balance between those who need permanent accommodation for rent and those who are making short-term visits. Clause 210, mentioned by the noble Baroness, introduced by the Government on Report and headed “Registration of short-term rental properties”, is a very useful step which I welcome. I also welcome the statements made about it in another place by Lucy Frazer, the previous Housing Minister. It proposes a new registration scheme for short-term lets, but this will not happen for some time, as consultation on the exact design of the scheme will not start until later this year, with decisions and actions later.

A registration scheme is a good first step but we need to build on this, as proposed in my amendment, and see much stronger controls. We need to do that if the planning system is to determine local priorities. We also need to make faster progress; only then will we see a better balance of housing options which will help families and young people who simply cannot find a place to live in some rural areas but also in London. Were she still able to attend, I am sure my noble friend Lady Gardner of Parkes would be speaking strongly in favour of this amendment.

A balance is important. Short-term lets can provide a useful boost to the local economy by promoting tourism where commercial accommodation is in short supply or very expensive, and they can be a useful source of income for those who do not need their homes all the time—for example, if they are away on holiday. However, we need a balance between second and first homes. My amendment provides a means of meeting that balance.

The Government’s legislation needs to go further by introducing a new use class for short-term rental properties, which, in turn, should be a precondition for the registration of such properties. We may not need to regulate short-term lets across the board, but making them a separate use class, as proposed in the amendment, allows full planning control in places such as seaside towns and the area just mentioned by the noble Baroness, Lady Hayman, where the growth in short-term letting has become a particular issue, or here in London, where there is pressure on the rental market.

There was a 1,000% increase in homes listed for short-term lets nationally between 2015 and 2021. That is 148,000 homes that could otherwise house local families that are available on Airbnb-style lets. In Cornwall, short-term listings grew 661% in the five years to September 2021. The county has roughly 15,000 families on social housing waiting lists and the same number of properties being marketed as housing lets. The noble Earl, Lord Devon, may mention his county, where short-term lets appear to be worsening an existing housing crisis, with nearly 4,000 homes taken out of the private rented sector and 11,000 added to short-term listings since 2016.

Currently, local authorities outside London have no legal means of preventing this loss of private rented housing to short-term lets. Several cases have come to light of people in rented housing in rural areas being evicted so that the property can be let on a short-term basis. In this context, it is worth mentioning the position in London as it shows a way forward. The Greater London Council (General Powers) Act 1973 —I declare an interest as I was on the GLC at the time—discouraged short-term lets by saying that the use of residential premises for temporary sleeping accommodation for fewer than 90 consecutive nights in London was a change of use, for which planning permission was required, so London residents face a possible fine of up to £20,000 for each offence of failing to secure planning permission. That position was basically confirmed in the Deregulation Act 2015. I see some advantage in simply extending this London provision to the rest of the country.

Finally, there are issues here that go beyond my noble friend’s department. Holiday lets get mortgage interest relief; residential tenancies do not. Holiday lets have no minimum energy and safety standards, and they qualify for business rates and small business rate relief. We need a cross-government approach to get a coherent and better-balanced policy on this important matter. Of course, I hope my noble friend will feel able to accept my amendment. If she cannot go that far—and I see from her body language that that may not be possible—will she commit to consulting soon on building on Clause 210, with a view to getting that better balance between the use of scarce housing stock in areas under pressure and to helping families for whom private renting is the only option?

My Lords, I will address the four amendments in my name and that of my noble friend Lord Shipley and comment on some of the others. We have already heard numerous examples describing why we need to address the issues around empty homes, second homes and properties available for short-term rent. As noble Lords are aware, some parts of the United Kingdom have already introduced measures to tackle some of them; for example, certification of tourist accommodation in Northern Ireland and licensing schemes for short-term lets in Scotland and Wales. Sadly, at the moment, England is being left behind.

I am pleased that at long last the Government are tackling one issue—the way in which some second home owners have gamed the system so that they pay neither council tax nor business rates—but many other problems remain. I live in east Suffolk, close to the popular seaside town of Southwold. With the recent growth in second home ownership and the rapid rise in properties available for short-term rent, of the 1,400 properties, now only 500 have full-time residents, while 500 are second homes and 400 are short-term lets; in other words, nearly two-thirds are not permanently lived in, and this has had a significant impact.

House prices and long-term rents have risen steeply. Local families are being forced out and those working in the local tourism industry cannot find or afford local accommodation, so they go elsewhere. As a result, many of the bars, restaurants and hotels now have staff vacancies. As local councillor David Bevan said recently, soon people will not want to visit

“a soulless toytown where no one lives any more”.

Sadly, similar problems exist in my former constituency of Bath, with the added concern that students from its two universities are having increased problems finding accommodation. So I welcome the Government’s appreciation that something needs to be done. In their recent consultation on a way forward, they provided detailed descriptions of the problems and a long list of places where such problems exist, from Devon and Cornwall to York and Cumbria. However, I am simply not convinced that the way forward as presented in the Bill goes far enough.

On empty dwellings, as with second homes and properties for short-term let, we need more data than is currently available. So, on these Benches, we support Amendment 166 in the name of the noble Baroness, Lady Hayman of Ullock. A partial solution to the problems caused by second homes does lie in allowing councils freedom to increase council tax on such properties. On these Benches, we have argued previously for a maximum premium of 300%, not the lower amount argued for by the Government; so we also support Amendment 167 in the name of the noble Baroness, Lady Taylor of Stevenage,

The Government’s plans for registration of short-term lets are necessary but insufficient. We believe that a full licensing regime is preferable so we support Amendment 445C in the name of the noble Baroness, Lady Hayman, as well as her probing Amendment 422, which explores ways in which councils could restrict the number of short-term lets in their area. However, I believe that we can go even further: hence Amendments 264 and 265, which propose the establishment of new use class orders for both second homes and holiday rentals. Adoption of these new use class orders—incidentally, supported by the LGA, of which I too am not a vice-president—would significantly improve data on the situation right across the country.

More importantly, when coupled with a licensing scheme, new use classes would enable councils to maintain, among other things, the stock of long-term rental properties in their area. It would give communities the power to decide their own destiny. We have already heard from the noble Lord, Lord Young of Cookham, and the noble Earl, Lord Devon, that their Amendment 294 also calls for a new use class order, at least for short-term rental properties, with change of use to STL conditional on registration. I am more than happy to accept that theirs may be a neater solution—I am totally open-minded—but, clearly, we want to move in exactly the same direction. I also entirely agree with the noble Lord about the need for speedy action on these issues and not the rather long timescale currently proposed by the Government.

I am aware that, in its excellent report on short-term lets, your Lordships’ Built Environment Committee argued against nationwide measures of this sort. It argued that it should be for councils themselves to decide. Adopting such an approach, I believe, has two drawbacks. First, it would mean that we would not have nationwide data about second homes and properties for short-term rent. Secondly, it would mean that councils, which would not be able to get the necessary agreement to adopt and then implement such an approach quickly, could potentially be too late to adopt control measures.

After all, we have seen very rapid rises in short-term lets in some parts of the country. In Cornwall, for example, short-term listings went up by 661% in the five years to September 2021, while in South Lakeland there was an increase of just 32% in just one year. However, we will of course listen to the arguments and the Minister’s own thoughts. Whatever route is finally decided, there needs to be adequate enforcement—a problem that has been acknowledged in London, which already has some of the measures that we are supporting. It would be helpful if the Minister could share her thinking on the issue of enforcement and the possibility of strong penalties for those platforms that list unlicensed or unregistered short-term lets.

Given the importance that we in this House have rightly placed on neighbourhood plans, we have tabled Amendment 228, which would enable neighbourhood plans to include policies that related to the proportion of dwellings that may be second homes and short-term holiday lets under the use classes in the earlier amendments. I am aware that the powers to do so may already exist in relation to new properties in the neighbourhood plan area, although in the case of St Ives it took a High Court decision to confirm that. Our amendment would enable the control of changes of use of existing properties as well as ensuring beyond all doubt the power in relation to new properties.

I welcome the Government’s intention to address the problems that I and others have outlined, but I believe that the amendments in this group, including those proposed by my noble friend Lord Shipley and me, argue that even more needs to be done. I hope I will hear words of encouragement from the Minister when she responds.

My Lords, I am speaking to Amendment 172A in my name, but I want to commend the breadth of what has already been described in the three speeches that we have already heard. I strongly commend Amendment 170, in the name of my noble friend on the Front Bench, about bereavement; we have to be careful what we do here.

I want to make it clear that I am not speaking about empty property. I think there is absolute clarity about taking action to bring back into proper use, as either rented or owner-occupied premises, those homes that have been empty for a length of time. However, I shall touch on some of the complexities relating to second homes. I declare a very long-term interest from 1987 onwards, because I was involved in having to have a second home as a Member of Parliament, as MPs outside a radius of 25 miles of London will inevitably have to do if they are serving their constituency appropriately. Not all do so, but these days most see it as their duty to have a foothold, a footprint, in their constituency, even if they spend more time than would otherwise be necessary in London.

Perversely, because of the nature of our housing market, even with the new rules through the Independent Parliamentary Standards Authority—which will pick up, on behalf of the public purse, the cost of second homes—there can be the very perverse situation where someone chooses to designate their second home in one place when actually it is their main home, because they do not want to be caught on their death in relation to capital gains, or when they move. There are all kinds of complexities that many people speaking today know more about than I do when it comes to the housing market.

I want to address the importance of the devolution of decision-making to local authorities, but with the proviso that those authorities are encouraged, in whatever way is appropriate, to do a proper research review themselves of the impact of the actions that they take, because the intent—and I have to say it is a very socialistic intent—of the legislation before us, in the debate that we are having, can have completely perverse consequences. Today we have heard references to short-term lets and Airbnb, which the right reverend Prelate the Bishop of Exeter mentioned last Thursday, and to holiday lets. They are very different, but all have very similar impacts in the short-term nature of those coming into communities which otherwise would have long-term owner-occupier or renting residents. I separate the two because there are already consultations going out—or pseudo-consultations—from local authorities across the country, consequent on and in anticipation of the passing of this legislation, which fail completely to distinguish between ownership and rent.

Of course, there are people with second homes who rent them on a long-term basis, perhaps on a lease, and those who are the owners of the property. In certain parts of the country, we have very large landowners who are landlords and have built up over the years enormous portfolios of rented accommodation. They are the owners and people are renting—many of them local people who managed to obtain a rent agreement in the past that still holds. There is a residue of old agricultural workers legislation in some parts of the country.

The perverseness I refer to is that, on many of these large estates, when accommodation for rent becomes available because the tenant leaves—for whatever reason—it is turned into holiday lets. They are turned into business rate, rather than council tax, providers, which changes the character and nature of the locality. Of course, many second-home renters or owners may turn up infrequently. However, many, not least because of the experience we had from Covid, are spending a quite lot of time in both their homes using the facility of being online and—if I might touch on a controversial issue—working from home for part of the week. This has also transformed the nature of how the impact might be felt at a local level.

I want to put on record that, although I have no problem at all with this, it is important going forward—and I hope the Government will bring forward their own amendment—we ensure that a proper economic and social impact assessment is undertaken by people who know what they are talking about. I am afraid to say this as someone who spent many happy years in local government, but many authorities, particularly small ones, do not have officers with the first idea how to conduct a proper research survey, never mind analysing it.

If we do not get this right, it will have consequent perverse outcomes none of us wants. The purpose must surely be to try to get as much accommodation as possible available for long-term local provision, either for let or owner-occupation, to keep the life of those communities going. If action is taken that has a very different effect and pushes accommodation that is currently available for rent into holiday lets, we will have achieved exactly the opposite outcome to the one we seek. As I have some experience of this and know what is going on, for example in the Peak District, I counsel very strongly that we build in guidance so that we get what we think we are getting, rather than the opposite. It does not matter if it is a 100% or 300% council tax hike if you get the wrong answer and it switches to national business rates. Neither local people nor the local authority will be the gainer.

My Lords, I offer Green support for the general direction of all of these amendments. I will attempt not to repeat the tale of woe we heard, but I will make a couple of additional points and also pass on some good news, because I think we need some at this point. In the debate on the last group, I should have declared and put on the record that I am a vice-president of the Local Government Association.

On the good news, it is worth looking at how great work done is being done around the country, on a limited and small scale, to bring empty houses back to becoming homes again. In Preston, there is a scheme called Making Homes from Houses, which has already refurbished 30 empty homes that, collectively, were empty for a net 112 years. The process is under way for 20 more. In Hastings, a community group called Hastings Commons has been converting so-called tricky buildings into homes and eventually establishing them as community land trusts. So some really good things are happening, but very much on a small scale. We have to understand that where we are now is not any kind of inevitability but the result of decisions and policies that this group of amendments collectively seeks to find ways to change.

This certainly belongs in the levelling-up Bill. According to the most recent figures I could find on long-term empty homes, the top five cities—Birmingham, Liverpool, Durham, Bradford and Sheffield—are areas where properties often may not have a very high value, so people just leave them to sit there because it does not feel worth it to do anything with them. By contrast, I would be interested to hear if anyone has any thoughts on what to do with what I would have to describe as the obscenity of “buy to leave” in some of the wealthiest areas of the country, where people buy what could be a home for someone and just hang on to it as an asset that they assume will appreciate, but never live in it or do anything with it. I wonder whether we could do something about that, because this is not a large group but it is a big issue in areas of the country with the most intense housing pressure.

On short-term lets, it is worth noting some figures that I found: in some areas, renting a home for 10 weeks through Airbnb can pay as much as a full-term year-long let to a normal local tenant. So we have an absolute market failure, and we need to intervene here to ensure that we get the kind of outcomes that we need, which surely should be homes being regarded as secure and affordable places for people to live, not primarily as financial assets. Of course, getting to that ideal scenario will require a lot more change than is proposed in this group, but at least here we are heading in the right direction. I very much agree with the noble Lord, Lord Young of Cookham, that some steps are being made, but they are not nearly fast enough.

My Lords, I will speak very briefly about saturation areas and Article 4 directives that already exist under the planning system. I support the amendment in my name and that of my noble friend Lord Foster of Bath. It is important because it would enable neighbourhood plans to include policies relating to the proportion of dwellings that may be second homes and short-term holiday lets under a use classes order proposed by other new clauses in this set of amendments.

Saturation areas already exist and can be defined under the licensing system—for example, for outlets serving alcohol. They operate under the licensing system. Houses in multiple occupation are also subject to a licensing system, but, in my city of Newcastle upon Tyne, they now use the planning system as well, following a lot of work that the administration that I led undertook. Under the Article 4 directives, permitted development rights can be restricted where the conversion of a family home into a house in multiple occupation would continue a trend of making family homes very expensive to buy and not easy to obtain. Without those Article 4 directives, the nature of a neighbourhood can change significantly.

So I ask the Minister what the difficulty is, in principle, over second homes and short-term holiday lets. As we have heard, there is fairly widespread support now for giving local councils and local planning authorities greater powers to restrict long-term residential homes being converted into short-term lets or second homes. There is a range of principles that I think local authorities should be able to decide for themselves. They may decide that they want to encourage short-term lets and second homes because it might increase the number of people who are buying services from local retail outlets and local leisure outlets—restaurants, pubs and so on. There is some evidence in some places that I know that that may be the case, but surely it should be for the local planning authorities themselves to be making those decisions.

The simplest way is through the use classes orders that we have heard about, but the principle already exists within existing legislation, both within the licensing system and within the planning system. My noble friend Lord Foster said that more needs to be done, and that is absolutely the case. Whereas I would support a higher council tax payment for second homes—I think there is justification for that—I am not actually convinced that it will solve the problem. I think we have to use the planning system to resolve the difficulty we face, so I hope very much that the Minister will give further consideration to this issue, which is affecting so many small communities, particularly in rural and coastal areas. The time has come for the Government to act.

My Lords, I will get the guilt off my shoulders through your Lordships’ provision of the confessional: I declare an interest as co-owner of a second home in the West Country and of two short-term let properties in the same area. All, like the house I live in, which is in another part of the country, are legacies of estates that have been broken up and whittled down. Both areas have important family historical and indeed, in some cases, national historical associations.

Having declared that, I ought also to declare to the noble Lord, Lord Foster of Bath, who mentioned the Built Environment Committee, that I was, until the latter part of January, a member of that committee, and very privileged to have been so under the chairmanship of the noble Lord, Lord Moylan, who I am pleased to see in his place, and before him, the noble Baroness, Lady Neville-Rolfe. So I am familiar with the matters that were brought before us. However, I shall leave a lot of that to one side because there has been a bit of disaggregation in the groupings here. We have group 10 coming up, in which aspects of this will recur, and I find that quite difficult to deal with: I shall try to avoid getting up then and saying the same thing all over again and boring your Lordships.

While I have involvement with both normal assured shorthold tenancy properties and short-term buy to let, I certainly do not have anything to do with keeping property deliberately empty: that would be complete anathema to me, and I say so as somebody with professional training: I am a chartered surveyor and I know that all that happens with empty properties is that they deteriorate. They are much better occupied and lived in or used in some way.

I agree with the general premise that residential properties should not be deliberately kept empty for no good reason. I know that in some areas—the City of Westminster is one—there was a thought that foreign investors were buying up high-end residential accommodation and keeping it empty under the premise that perhaps it was less valuable if it had been previously occupied. It takes all sorts, but that is a particular situation. I support the noble Baroness, Lady Hayman of Ullock, in her Amendment 166 because there is a great deal of speculation about how many empty properties there are and where they are. They are not always in the places where people want or need housing and have to live and work. So, first and foremost, there is a distribution problem, along with a numbers problem. We need to sort that out, and there needs to be better data on that.

I would go further and suggest that the reasons why a property might be empty need to be understood before we set about making dramatic changes, either to the amount that is levied or to planning, although I take the point made by the noble Lord, Lord Foster, that something probably needs to be done in some of the areas that the noble Lord, Lord Shipley, referred to—the hotspots. They are not actually everywhere; they are not in every town and city; they are in defined places. Even those who particularly object to the idea of second homes and holiday homes altogether on principle recognise—and the data seems to show—that these are in quite specific areas. They are not necessarily in holiday locations at the seaside; they can be in the middle of cities and in parts of Greater London. We need to identify that.

We should not underestimate the inventiveness of those faced with a surcharge, any more than we should fail to consider the equity of a surcharge where there is a genuine reason the property is empty. The noble Baroness, Lady Hayman, referred to that and I use the example of the Ds: death, disrepair, dispute, debt, decarbonisation and, of course, redevelopment. Sorry, “redevelopment” is not a D, but noble Lords will get my drift.

Another aspect is that if there are to be additional charges, is that for the purpose of rectifying some particular, identifiable ill or mischief that is occurring, or is it just another tax? If it is just another tax and it is going into some jolly old pot, I am not particularly keen on that. There needs to be some degree of hypothecation. If there is a demonstrable case—for instance, that empty properties affect affordability in a locality or are adversely affecting incomers who might be economically active—the tax yield generated should perhaps be devoted to that or allied purposes and not put in some general pot. Presumably the case needs to be made.

I agree that ultimately, subject to some sort of national framework and means of analysis, the decision should be for the local community to put in place—and not necessarily be dictated from on high. The authorities, having made the case, must accept that the principle stood behind that is binding on them; otherwise, we risk a rather unedifying and opaque state of affairs, where the power is invoked for one reason but implemented for some entirely different objective altogether, and I would not be keen on that. We do not need a knee-jerk reaction to all that. There needs to be a consistent methodology for assessing the nature of empty second properties or short-term letting, and the detrimental effect these are having.

The noble Lord, Lord Foster, gave a graphic account of the issue, which I know from—

Before the noble Earl moves on to another point I raised, could I ask, through him, for the Minister to perhaps confirm that even in the current legislation as proposed, it will be possible for councils to add a premium on the council tax for empty properties? It would be for the council to determine how that money is used; for example, my own local council has already a debate on this issue and proposed that the vast majority of additional money raised will go towards the building of more affordable homes in the area—to address the problem that is now being created because of the empty properties and short-term lets.

I thank the noble Lord for his intervention, because that is exactly the point I am making about having a degree of hypothecation. In other words, it should not just go into the general purposes fund. I hope the Minister will comment on that, because there is a question of trust and transparency in this. If these things are to be robust, they will need that.

From my observations, I know that what the noble Lord, Lord Foster of Bath, said about the instances and the impact in some of these hotspot areas is true. However, we need a bit more data to get the visible, empirical facts. The noble Lord, Lord Blunkett, referred to that, and I entirely agree with him. We also need to identify the likely economic outcomes of certain actions. Letting platforms were referred to; we need an analysis of how they operate for some bits of businesses but not others, because they are doing lettings direct or whatever it may be, to get some idea of how that is functioning.

There is a bit of incoherence here. For a while, conversions into residential accommodation in rural areas were often subject to the condition that they could not be occupied full-time. They had to be occupied, effectively, as holiday accommodation. Usually, they could be occupied only for something like 11 months of the year continuously, because local authorities did not want to give consent for new, independent dwellings in the countryside; there was an objective not to add to them, which I understand.

When I attended a meeting on second homes at Exmoor National Park, it was asked why there was a reduced council tax assessment for people with second homes. It transpired that only by having the bait of self-declaration could they identify how many second homes they had in the area, so that is how they did it. I say incoherence, because one really feels that the world has gone mad in some of these situations.

There is a good deal of misinformation about what is perceived to be the vast profitability of short-term lettings. When I had the privilege of being on the Built Environment Committee, I ran a little exercise, which established what I knew: that I would be better off in headline income letting full-time on an assured shorthold tenancy. However, that would probably be not to a local person but to some writer, artist or someone who wanted a nice location. The real reason behind this is that, if you are dealing with an old stone cottage which requires constant maintenance and a lot of refitting—never mind that you may have energy issues and things breaking down; things go wrong in old cottages more than they do in new ones—you are constantly in and out. The only way you can keep control of that is short-term letting, because you can take a week out and get in there and fix the boiler and all the other things that have fallen apart. It is really not for the faint-hearted.

When you compare the weekly headline rents for short-term holiday lettings with those of an ordinary assured shorthold tenancy, you are not looking at like for like. You are not dealing with fully serviced accommodation, where all the linen and services are paid for, and where somebody just walks in and all they have to do is buy their own food and go, with all the cleaning and everything else being done in-between. All that costs money. One of the greatest litmus tests of health and well-being in these rural areas is whether you can get a cleaner or someone to fix your windows. That is the real test of what is happening in the economy. With that, I will sit down and wait for group 10.

My Lords, it is a pleasure to follow the noble Earl, Lord Lytton. I will speak briefly and narrowly to the point made earlier by the noble Lord, Lord Foster, in which he argued for a national registration scheme rather than one which, as the noble Earl said, the Built Environment Committee said should be available locally and at local option. The noble Lord’s reason was that having a national registration scheme would make it easier for the Government to gather large amounts of data. That is a very weak reason for what would be an astonishing intrusion into privacy and the rights of property.

I believe the noble Lord, Lord Blunkett, said that a national scheme was preferable because it could be implemented more quickly than one implemented by a local authority.

That was not me.

I beg the noble Lord’s pardon, but I heard those remarks made. I am simply saying that I do not believe that point; any scheme implemented by the Government at a national level will take a very long time to bring forward, whereas in my experience a local authority, duly empowered and with sufficient interest in the matter, could act more quickly.

One of the important findings of the Built Environment Committee was that this problem exists, as the noble Earl said, in very localised areas. We need to understand the problem if we are to find the solution, and so we need to understand the very important localism and find locally tailored solutions rather than rush into a national scheme which would be applied to the whole country and would involve a great deal of resource being spent to no particular purpose. As the noble Earl said, we will have the opportunity to return to this on group 10, whether this evening or on our next day.

As certain noble Lords have said, there is an anomaly in the taxation of properties, depending on how they are declared. If they are declared to be residential, they are liable to domestic council tax like anybody else, but if they are declared to be in business use, which is what an Airbnb-type property might be, they pay business rates. However, business rates are not paid by anything other than quite large businesses; very small businesses do not have to pay them. Therefore, by declaring oneself for business rates, one then qualifies for threshold exemptions that are not available for domestic council tax payers. Effectively, one escapes any form of tax on the property at all.

That is clearly an anomaly about which it would be worthwhile the Government thinking, but it seems to me that the right way to address it is to change the tax rules rather than introduce a large distortion in the property market. It is giving us a solution at the wrong end; if the problem is with the tax rules, it would be better and easier to remove the anomaly from them. However, we will have an opportunity to return to this later.

My Lords, a widow in Thoresby, in Nottinghamshire, is currently being evicted by the office of the Thoresby estate, having lived for 62 consecutive years in a rented property on that large estate. The reason given by the estate managers is that the new higher environmental standards required of landlords by government mean that doing up the property to an appropriate standard would be too expensive.

Therefore, this widow—after 62 years of renting and living in the same property—is currently being evicted. If, as in this case, a multi-landlord—and a recipient of many state grants over the years, as well as lottery money—has not invested sufficiently during those 62 years to bring the property up to a decent standard, there needs to be leverage for the local authority—in this case, Newark and Sherwood District Council—to ensure that a failure by the landlord to upgrade a property over a 62-year family tenancy does not result in an eviction and the emptying of a property. If the amendments in this group are not acceptable to the Government, how will they ensure that some decency prevails and that there will be effective use of existing properties which will become empty under current plans? What precise leverage will they give a local authority to ensure that this absurdity and injustice can be remedied by the local authority?

Before the noble Lord sits down, perhaps he will indulge me for a second. I know he knows the area very well and that the Dukeries have very large landlords and estates that he has described. Has he any knowledge in this tragic case as to whether it is likely that such an estate would sell the property, having evicted the tenant and renovated it, or is it likely that it will put it on the market as a holiday let?

As reported in the last few days, the estate is saying to the local media that it does not have the money to renovate so the property will become empty. Over the years, I have seen on other comparable estates similar properties: properties in an appalling situation in terms of utility and investment. It is the failure to invest by landlords that is the problem. I repeat to the Minister: what remedy is open to the local authority to ensure that this property remains available for someone to use—preferably so that this widow of 62 years’ tenancy is able to continue to live in what I think it is reasonable to describe as her family home?

My Lords, this group of amendments concerns second homes, holiday lets and empty properties. I declare my interest as set out in the register as the owner of a second home in Wales.

In relation to Amendment 166, tabled by the noble Baroness, Lady Hayman of Ullock, I share her commitment to ensuring that we have the best-quality data to inform our policies. Indeed, I also share some of her concerns. I can assure her that we already have good systems in place; for example, local authorities report annually on the number of properties that have been classed as empty for more than six months. This data is published as part of the council tax base statistics. It is also used as the department’s measure of long-term empty dwellings that are published in the live tables on dwelling stock. This latter data includes the number of properties vacant on a particular day, as well as the number of properties that have been empty for more than six months.

As part of our council tax base statistics, we also detail the number of properties that are subject to the existing long-term empty property council tax premium. This shows the number of properties subject to the premium in each local authority area, broken down into the different levels of premium that apply, depending on the length of time that the property has been empty. We will continue to further refine the data we seek from local authorities to ensure that we have data on how many properties are subject to the extended premium, having been empty for more than 12 months. I hope that the noble Baroness is satisfied with that assurance on data that we already collect and propose to collect.

I turn to Amendment 167, tabled by the noble Baroness, Lady Taylor of Stevenage. The Government understand the concerns that a high concentration of second homes can have a negative impact on local communities. We have already introduced a higher level of stamp duty for purchases of second homes. We are also investing £11.5 billion into the affordable homes programme that will deliver tens of thousands of affordable homes. Clause 76 provides a further power for councils to use, enabling them to apply a premium on top of the existing council tax on second homes. This will generate additional resources for councils to reinvest, as they see fit, into local services and to improve the sustainability of local communities.

We need to ensure, however, that in introducing a premium, we strike the right balance. We must not lose sight of the fact that second homes can benefit some local economies and the tourism sector, particularly when they are regularly used as holiday homes. They can also allow people to work in and contribute to the local economy of the area, while being able to return to a family home in another part of the country.

I know that the Welsh Government have decided to allow councils there to increase the level of the existing premium on second homes to 300% from this April. That is, quite rightly, a decision for them. However, it is telling that while the Welsh Government are increasing the maximum premium that could be charged, only three of the 22 councils in Wales make use of the current maximum of 100%. The Bill includes provision for the Secretary of State to introduce different levels of premium in future, but it makes sense to see the impact and to assess the evidence of this new measure before we consider taking any further action.

I turn to Amendment 168, tabled by the noble Baroness, Lady Taylor, and Amendment 168A in the name of the noble Lord, Lord Berkeley. It may be helpful if I set out the rationale for the approach in this particular part of the clause, and to make clear what it does not do. The clause does not require everyone who purchases a second home in the future to be given at least 12 months’ notice of the application of a council tax premium on their home. If a council has introduced a second homes premium in its area, it is quite reasonable to take the view that the purchaser would have taken account of that policy as part of their decision to purchase. Nevertheless, the Government believe that it would not be fair and proper to those individuals who currently own second homes—and who may have done so for decades—to be faced suddenly with a significant change in their tax liabilities without a reasonable period of warning prior to its introduction. Therefore, the clause requires that, prior to the initial introduction of a new premium, councils should give existing owners of second homes an appropriate period to consider how they might want to respond to the measure. They may choose to sell, they may decide to retain it as a second home, or they may wish to explore alternative uses.

As the amendment in the name of the noble Lord, Lord Berkeley, demonstrates, what might constitute an appropriate period of time before a new tax is applied is a matter of judgment. Given the impact that the measure may have, the Government believe that a period of one year prior to a premium’s introduction provides an appropriate window within which individuals can consider their response. Once the premium is in place, it will apply to all liable properties covered by the council’s determination. Although I understand the desire of the noble Baroness and the noble Lord to ensure that councils have access to these powers as soon as possible, the consequence of Amendment 168 would be that those owning second homes could suddenly become liable for additional tax, with very limited time to respond.

In relation to Amendment 170, I am grateful to the noble Baroness, Lady Hayman of Ullock, for setting out her concern to support those individuals who may become responsible for a home following a bereavement, and to protect them from the risk that they may become liable for a premium. It is worth noting that the council tax system already provides significant support in cases where a property becomes empty following the death of the owner. If there is no other liable person, no council tax will be due until the grant of probate. If the property remains empty, there is then a further period of up to six months following the grant of probate before council tax becomes due again.

Where a property is exempt from council tax, a premium cannot be applied to it. In such situations, therefore, neither a second homes premium—as set out in this clause—nor an empty homes premium, as provided for by Section 11B of the Local Government Finance Act 1992, can apply. The noble Baroness makes a strong case for a further period of exemption from the second homes premium in those cases where a property has effectively become a “second home” as a consequence of bereavement. I do understand those concerns; it is certainly not the intention of the clause to capture all those who have unwittingly become a second home owner in such situations.

The noble Baroness has set out the arguments in favour of a two-year exemption where a property is inherited, and I can certainly see that there may be a case for some further protections. I trust that the noble Baroness will be reassured by the fact that Clause 76 includes the power for the Secretary of State to make regulations to prescribe the types of properties that should be exempt from the premium. Those exemptions could be based on the nature of the property or the circumstances of the owner.

Before creating any potential exemptions, the Government would wish to seek views through consultation to develop a well-informed basis on which to make regulations. That will provide the opportunity for everyone to feed in their suggestions and to enable the Government to reflect on any exemptions from the second homes premium that should be introduced. It will certainly be the Government’s intention to make any such regulations before the premium comes into effect.

Regarding Amendment 172A, in the name of the noble Lord, Lord Blunkett, I thank the noble Lord for setting out his arguments to support his proposal for an independent economic evaluation before the introduction of council tax premiums on second homes. Councils will already be fully alert to the challenges facing their local areas when it comes to the impacts caused by large numbers of second homes. It is clearly right that councils will want to have reflected carefully on the merits of introducing a premium, and at what level, and also how they propose to make use of the additional resources generated by a premium.

I welcomed the endorsement by the noble Lord, Lord Blunkett, of the hope that devolution to local authorities should enable them to undertake a proper review of these housing needs, and of course this will be helped by having the correct data available on which to base these decisions. As always, the noble Lord made a number of thoughtful observations, including on the way that the use of second homes has changed since the pandemic and with the advent of working from home.

I am sure that, in considering whether to introduce a premium, councils will want to reflect on the potential behavioural responses that might follow. This might include some second home owners deciding to use their homes as holiday lets. Such steps would clearly have an impact on the potential revenues, and I am sure that councils will want to note that. The measures we have set out in the Bill provide councils with the discretion to introduce a premium, and at what level, up to the statutory maximum; it does not require them to do so. We believe that it is right to trust councils to make their own decisions on whether to introduce the premium, informed by their own knowledge and experience of the impacts of second homes. Councils will of course also have the freedom to decide how to make use of that funding.

Councils will be accountable in the normal way for the decisions they make, including the introduction of the premiums and any future changes they wish to make. As such, I believe it is right that we trust local judgments and avoid dictating what considerations councils should take into account prior to making any changes to the council tax premium.

I now turn to Amendments 171, 442 and 445C in the name of the noble Baroness, Lady Hayman of Ullock, Amendments 228, 263, 264 and 265, tabled by the noble Lords, Lord Foster of Bath and Lord Shipley, and Amendment 294 in the name of the noble Lord, Lord Young of Cookham. These are highly important matters for many, not least the communities that feel the effects of second homes and holiday lets most acutely. As such, although the final design of the scheme will depend on the views we hear in our consultations, in relation to Amendment 171, these are locally specific matters with a strong connection with the planning system.

Amendment 228 seeks to allow neighbourhood plans to set policies in relation to the number of properties in an area that are permitted to be used as second homes or holiday lets. Neighbourhood plans are an important part of the planning system that allow communities to shape developments that meet their needs. Existing legislation, and the changes within Clause 91 of the Bill, already allow for policies relating to the sale or use of dwellings to be included in a neighbourhood plan. Some areas, including in Northumberland and Cornwall, already have such policies in place.

The Government recognise the impacts that the proliferation of second homes, holiday lets and temporary sleeping accommodation can have on communities in some areas. We have heard, for example, the concerns of areas such as the Lake District, Devon and York regarding the impact of increasing numbers of short-term holiday lets on the availability of homes for local people and the broader community. I have already mentioned the action the Government are taking, both through this Bill and elsewhere, to address these issues. We know that solutions for local areas will need us to look at practical solutions that will help to address specific local issues without unintended consequences.

Amendments 263, 264 and 265 all share a common feature by introducing a transaction feature into the definition of development. They seek to require that planning permission be obtained for a property to be used as a second home or holiday rental following a change of ownership. This requirement applies whether or not they were used in that way before the change in ownership. Planning permission is required for development, including the material changes of use; a change of ownership does not constitute development. The implications of treating transactions as falling within these definitions would be ongoing uncertainty and cost for home owners, buyers and the housing market as a whole. The Government are therefore not convinced that this approach is quite right; we already have the power in the Town and Country Planning Act 1990 to introduce a use class for holiday lets, secondary or supplementary residences.

In relation to Amendments 265, 294, 442 and 445C in particular, we have announced, in addition to the registration scheme in the Bill—on which we shall be consulting—that we will consult on the introduction of a planning use class for short-term lets. This consultation will in particular seek views on the definition of a short-term let. As such uses are not an issue everywhere, we will also consult on the introduction of national permitted development rights for the change of use from a C3 dwelling-house to a short-term let and vice versa. These rights may then be removed by making an Article 4 direction where there is a local issue, meaning a planning application would then be required where there is a material change of use.

We are also exploring how, were this approach to be adopted, the register could support local planning authorities in the application and enforcement of any use class changes, and I hope that the noble Lord, Lord Foster, can await the outcome of these consultations. Further detail on the timing of this consultation will be provided—and here I have a minor victory for my noble friend Lord Young: I have been able to change it from “in due course” to “shortly”. Sadly, I was not allowed to go further than that, but I do believe that “shortly” really means “shortly”. Subject to the outcome of the consultation, were the new use class introduced, the changes would help local authorities control the proliferation of such uses where existing homes seek to become used for short-term lets.

In relation to the contribution of the noble Lord, Lord Mann, I will have to take away that very sad story and ponder on it a bit further. But with those comments, I hope I can persuade noble Lords not to press their amendments.

My Lords, perhaps I ought to start by saying that I am also not a vice-president of the LGA, seeing as other noble Lords seem to have made that clear. This has been a very good debate with a lot of speakers, and I thank all noble Lords who have taken part. One of the things that has come across is the significant recent increase in short-term lets and the fact that something does need to be done around this.

I thank the noble Lord, Lord Young of Cookham, for his support, his amendments and his speech. He made the very important point that a registration scheme is a good first step, but we do need to make faster progress on this. As he said, a consultation to get a better balance between first homes and second homes would be a very good start. I also congratulate him on his small victory, which the Minister just announced. The noble Lord, Lord Foster of Bath, made the important point of the significant impact on prices and affordability of more homes going to short-term let, and the fact that the Bill does not go far enough as it stands, as far as we are concerned. Again, I thank him for his support for our amendments.

I would also like to thank my noble friend Lord Blunkett for his support for my Amendment 170 regarding bereavement. And, while I am on Amendment 170, I am really pleased that the Minister said that there is going to be further opportunity to look at this, and perhaps some consultation. I would be really pleased to be kept informed of any developments on this area, but it is very good that people are listening and taking account of this particular consideration.

My noble friend Lord Blunkett made an important point that there needs to be an economic and social impact assessment, and that it needs to be made by people who know what they are doing in this area. The noble Baroness, Lady Bennett of Manor Castle, referenced examples of where empty buildings are being brought back into use as homes. She is absolutely right to make that point—we need to look at where good practice is happening around the country and see how we can then spread that into other areas. The noble Lord, Lord Shipley, talked about saturation areas, but they can be very difficult to enforce. Perhaps the Government could look at how to make this option more accessible to local authorities and consider the noble Lord’s suggestion further.

The noble Earl, Lord Lytton, was right to say that all that happens with an empty property is that it deteriorates. That is, of course, one of the problems. I thank him for supporting my Amendment 166. He also made the valid point that this is about understanding not just where the empty properties are but why they are empty. The noble Lord, Lord Mann, talked about what can happen when properties are not properly looked after and gave a dreadful example.

On Amendment 167, the Minister referenced stamp duty as something the Government are already doing, but it does not go to local authorities—it goes to the Treasury. I thought I would just make that point. On Amendment 168, I understand her point about an inappropriate time for councils to inform owners of any increase in council tax, but we still think that one year is quite a long time.

I am very glad that, in winding up, the Minister mentioned that the Government appreciate the impact on communities of large numbers of short-term lets and second homes. At the moment, I feel that if something does not happen quite drastically, this is only going to increase. The reasons why we should deal with this were mentioned during the debate. For example, you can get more rent—it is quite simply a matter of sums. So we need to do more.

I thank the Minister. She gave a very thorough response, which is much appreciated. In the meantime, I beg leave to withdraw.

Amendment 166 withdrawn.

Clause 76: Dwellings occupied periodically: England

Amendments 167 to 168A not moved.