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'Holiday lets deliver six times more value than empty homes'

Merilee Karr furnished holiday let tax changes

Merilee Karr is calling on short-term rental owners, property managers, and industry professionals to demonstrate the value of holiday accommodation to the UK economy.

Karr, the former Chairperson of the UK Short-Term Accommodation Association, believes scrapping the furnished holiday lettings allowance – announced in the recent spring budget – could lead to more empty properties up and down the country.

“The abolition of the tax treatment for furnished holiday lets hurts small businesses across the UK and is unlikely to have the desired effect of adding to housing supply,” said Karr, CEO of UnderTheDoormat Group.

“The biggest risk is that second homeowners, who will never be able to let their home to long-term tenants (because they use it for parts of the year themselves) will simply leave them empty. We know that a second home that is used as a holiday let delivers six times more value to the local economy than an empty second home. More empty second homes don’t help anyone.”

Karr also said it was important the government avoided hitting holiday home owners with a double whammy of extra taxation and new planning requirements.

“My message to the government would be, now that you have made this intervention, it is crucial to avoid implementing new planning requirements on top of this tax change. Changing regulations all at once means the impact will not be measurable. The solution to the housing crisis is more housing and more social housing.

“Short-term and holiday rentals bring jobs and income to local communities and the risk of over-regulation is that the very people they are seeking to help are impacted. The government is attacking the symptom rather than providing a real cure. Housing targets keep being missed and affordable housing isn’t being built – these are the fundamental causes of the housing crisis.”

As industry expert Richard Vaughton suggested in his article earlier this week, gathering accurate data about the industry is paramount before introducing new legislation.

Karr added: “Nobody knows the number of furnished holiday lets that are purely commercial compared to second homes that are used occasionally. If it is someone’s second home, it will never go into the long-term rental market. This is why a registration scheme is so important as a first step and can help the government to make better policy decisions. We all know that over-regulation of the sector, without the evidence base, could hurt local tourism and reduce supply, particularly when there are festivals and other events nearby.”

Karr also called on the entire industry – including hosts and property managers – to illustrate the positive impact of short-term rentals.

She added: “We need to demonstrate – with data – what value we bring as an industry. UK STAA is leading this at a UK level, but we need everyone, at all levels, to get involved. People need to mobilise and talk to their MPs if we want our industry to be understood and valued.”


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