A quarter of the houses sold in Wales in the financial year 2019/20 were either as second homes or ‘buy to let’. In some parts of Wales, however, the figure reached over a third of the total houses sold.
Top of the league was Gwynedd on almost 40% and where councillors and others have a long-standing complaint that house prices in parts of north-west Wales are well beyond the reach of most locals. In Anglesey, the figure was 36% last year.
This is happening despite the two authorities introducing a council tax premium for second homes. Gwynedd Council’s premium raises the amount owners pay by 50%. However recently the council has revealed that owners of holiday homes were using a legal loophole to avoid paying council tax.
Anglesey has also introduced similar measures by adding on a 25% premium for second homeowners, Similar moves had been considered by the Conwy local authority in the past but it was not proceeded with concluding that there were “too many loopholes in the system”.
In Gwynedd, the purchase value of the 820 homes sold as either second homes or ‘buy to let’ totalled £154m whilst the sale value of the 450 second homes sold in Anglesey was £92m.
Gwynedd Council officers estimate the council is missing out on £2m a year in potential revenue as owners of such properties seek to avoid paying the 50 per cent council tax premium by switching to business rates rather than council tax.
Cllr Dafydd Meurig the deputy leader of Gwynedd Council has publicly commented:
“The irony is that while there’s no shortage of housing in the county as such between six and seven thousand of our homes are owned by people outside the county and usually resident outside of Wales.
“On the other hand, we have people living with their parents and sofa surfing, which is a situation we can’t put up with for much longer.”
The annual statistics relating to the Land Transaction Tax in Wales collected by the Welsh Revenue Authority defines second homes as properties bought by people who already have primary residences, which can include property investors and landlords buying houses to rent out.
The data indicates that a similar situation is prevalent in south-west Wales. In the Swansea local authority area, 30% of houses were sold as second homes or holiday homes, ‘buy to let’ or companies like social housing providers buying properties The figure for Pembrokeshire was around 28% of properties sold, in Ceredigion, it was at 25%, Carmarthenshire 23% and Neath Port Talbot 24%.
The figure for Cardiff was at 26 per cent with Blaenau Gwent and Rhondda Cynon Taf both just above the Welsh average of 25 per cent.
The tentative conclusion by statisticians is that ‘buy to let’ properties are at least as prevalent as second or holiday homes
Pic. Llywelyn2000 / CC BY-SA (https://creativecommons.org/licenses/by-sa/3.0)