Holiday lets surge and impact on local communities

Research by Generation Rent reveals that by 2022 there were over 330,000 holiday homes in England, representing approximately 7% of the private rented sector. This surge in second homes and Airbnb-style holiday lets has been linked to landlords prioritising profitability, which in turn is driving families out of their communities. The tenant group warns that the expansion of the holiday home sector has been accelerated by a lack of effective regulation and tax advantages that make holiday lets more financially attractive than traditional residential tenancies.

Tax changes and council measures affecting holiday lets

Despite the overall increase, the number of holiday lets has declined in recent years due to tax reforms. The Conservative government ended the Furnished Holiday Letting (FHL) tax benefits, which previously allowed landlords to claim tax relief if their properties were let to holidaymakers for at least 105 days annually. In 2025, there were 268,152 second homes and 67,858 holiday lets, totalling 336,011 properties—an increase from 2022 but a decrease from the 2024 peak of 346,956.

Additionally, local authorities have been granted discretionary powers to charge up to 200% council tax on second homes, with over 70% of councils in England adopting this measure. These steps aim to discourage the proliferation of second homes and encourage owners to bring empty properties back into use.

Council enforcement leading to reductions in holiday lets

The report identifies the Isles of Scilly as the local authority with the highest proportion of holiday homes, at 31% of total housing stock. Other areas such as Westminster (5%), Wandsworth (1%), and Oxford (1%) have seen increases in holiday homes as a share of their housing stock.

However, some councils have successfully reduced holiday lets through enforcement. Camden, for example, recorded the largest decrease in holiday homes between 2021 and 2025, with a three percentage point fall. During the same period, Camden also saw a 61% rise in Empty Homes Premium charges, which target properties left empty for at least a year to encourage their return to the housing market.

In Manchester, holiday home numbers have fluctuated over the past 18 months. Generation Rent notes that many flats initially classified as second homes are furnished but have unknown occupancies, distinguishing them from empty, unfurnished properties. Over time, these may be reclassified as student or occupied dwellings. The report found that 73% of second homes in Manchester are not yet paying the relevant Empty Homes Premium, likely due to delays in classification.

Calls for stronger council powers to regulate holiday lets

Generation Rent is urging the government to grant local councils stronger enforcement powers to license and limit holiday lets. The group posted on X (formerly Twitter): “Holiday lets are pricing locals out of their own communities. The government must give councils the powers they need to license and limit them, now. Without action, tourism will keep taking homes.”

This call comes amid government consultations on new powers for regional Mayors to impose an overnight levy on holiday lets. The Ministry of Housing, Communities and Local Government has confirmed that any such levy would apply to visitors staying in hotels, holiday lets, bed and breakfasts, and guesthouses.

What this means for landlords and agents

Landlords and letting agents should be aware that the holiday let sector is under increasing scrutiny from both local authorities and the government. Changes in tax relief and council tax premiums are already influencing the market, and further licensing or restrictions may be introduced. Staying informed about local council policies and potential licensing requirements will be essential to ensure compliance and to manage the impact on rental portfolios effectively.

Suggested internal link anchors
– holiday lets regulation
– second homes in England
– Furnished Holiday Letting tax relief
– council tax on second homes
– Empty Homes Premium
– local authority housing policies
– holiday let licensing
– regional Mayors overnight levy
– private rented sector trends
– holiday home hotspots
– landlord tax changes
– holiday lets enforcement

TLA update
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