Council tax premiums having big impact on holiday lets
Summary
New research from Cumberland Building Society suggests that tax and policy changes are materially affecting holiday let owners’ decisions to remain in the sector. Council tax premiums were identified as the biggest influence, alongside changes to mortgage interest relief, the Furnished Holiday Let regime, capital allowances and reporting requirements.
Why it matters
Holiday let activity can affect local housing supply, investment patterns and the balance between short-term and long-term rental stock. Surveyors advising on valuation, investment or planning matters should note the sensitivity of this sector to tax and regulatory change.
Key points
- 72% of surveyed owners said council tax premiums were a major or moderate influence on participation in the market.
- 70% cited removal of full mortgage-interest relief and 67% cited abolition of the Furnished Holiday Let tax regime.
- 55% said they would be very or somewhat likely to sell if a C5 planning class were introduced locally.
- Most respondents said they could absorb a 1% rise in mortgage rates, though some would need to reduce costs or convert to long-term lets.
- 84% said they were prepared for the National Registration Scheme.
Organisations:
Cumberland Building Society, Pegasus Insight
Regulations:
Furnished Holiday Let tax regime, National Registration Scheme, C5 planning class
Locations:
UK
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