Fri 5 August 2011
Last week, Julian Brazil leader of the Liberal Democrat Group for South Hams District Council called for the 10 per cent council tax rebate on second homes in the area to not only be withdrawn, but for the tax to be greater on second homes than residential properties. In failing to differentiate between rarely used second homes and commercial holiday let businesses, such proposals risk alienating tourism-driving holiday home owners and damaging local tourism long term.
Demand for UK holiday lets has grown further still in 2011 with a quarter of a million enquiries for UK holiday cottage accommodation made so far this year via holidaylettings.co.uk™ - up 20 per cent year on year. Demonstrating the growth in demand for UK cottage holidays, this figure is 1.2 times higher than all UK holiday enquiries in 2008.
In the three years since the recession hit and ‘staycation’ became the 21st century term for domestic tourism, the number of second homes coming to the holiday lettings market has also soared. Holidaylettings.co.uk now lists 11,617 UK holiday homes - the greatest UK holiday let inventory in the industry.
“Holiday let businesses need councils to recognise them as forming an increasingly significant draw for local tourism and therefore differentiated from those second homes kept for private use by their owners,” comments Kate Stinchcombe-Gillies, spokesperson for holidaylettings.co.uk. “Instead of challenging these entrepreneurial tourism businesses, there is a fantastic opportunity for councils to retain their reward of the more entrepreneurial second home owners by reserving council tax discounts for those trading as holiday lets. If a hike in council tax for non-commercial second homes were in turn to encourage more of those owners to also enter the holiday lets marketplace, the councils would have a win-win situation.”
Minimum £1.3 million tax increase on holiday home businesses
National adoption of the discount withdrawal could cost holiday let businesses at least £1.3 million a year - based on Devon’s Band D council tax of £1,116 a year for residents and £1,005 for second home owners benefitting from the 10 per cent discount.
To also increase the tax for second home owners above that for residents could significantly impact the ability for holiday home businesses to run profitably.
According to the South Hams Tourism Strategy 2007-2012, tourism to the area contributed more than £220 million as far back as 2003, supporting more than 6,000 jobs. Specifically, cottage and apartment accommodation was recognised as attracting more than £23 million for the area in 2005 – acknowledging the significance of this tourism sector for the area.
Earnings potential for holiday let owners
If the council tax discount remains in place for holiday let owners, the income available from running holiday lets could encourage those privately retained second homes to also make their homes available to tourists.The average weekly income from a two bedroom cottage in Devon during the summer months is £745. With many cottages providing sofa beds to increase occupancy and keep costs down for families and groups, a property charging this and sleeping six costs just £124 per person for a week. The summer season in a destination such as Devon has potential to earn holiday let owners decent income from June through to mid September with additional peak periods during the Easter, June and October school holidays, plus long weekend appeal in between. A typical holiday cottage renter will then go on to spend in local shops, attractions, cafes and restaurants, contributing further still to the local economy.
Example average income and occupancy for two bedroom Devon cottage:
About Holiday Lettings:
Holidaylettings.co.uk was established in 1999 by Ross Elder and Andy Firth. Part of the TripAdvisor Media group since June 2010, the business continues to thrive as an independent brand from its offices in Oxford. Jonathan Dees has been managing director since March 2011.
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