Residents living in the England’s most desirable tourist hotspots fear the tax raid on holiday let owners announced in yesterday’s budget will wipe out staycation income, which is crucial for their survival.
The Chancellor announced yesterday that he would abolish the furnished holiday lettings (FHL) regime, which gives tax relief for costs incurred kitting out more than 70,000 holiday lets.
He estimates that the reduction will bring in £300million for Treasury coffers, but critics have warned that it could hammer areas reliant on tourism for their income by pushing people out of the market.
Residents in four of the most desirable staycation destinations have today warned abolishing the scheme – which can save them more than £10,000 per year – could have a devastating effect on their towns which are dependent on tourist spending.
Speaking exclusively to today, locals in Burnham Market, Lymington, Canford Cliffs and Lonhghirst said the abolition of the tax break have a devastating impact on their local economies while others welcomed the move they hoped would bring down house prices.
Burnham Market
Lauren Mason, 23, a bartender at The Red Hart Inn in Bodham, said a huge amount of trade is generated by all the holiday lets and self-catering cottages in the area
Locals make their way across the street in the 17th century town of Burnham Market
Pat Cubitt, 57, who rents out six holiday barns in Lower Bodham, near Holt, said the new measures were unfair on people like him who run a ‘proper business’.
David Wells, 91, who has lived in Burnham Market for 50 years, supported the crackdown in the Budget
Such is the level of interest in Burnham Market. It can be difficult for locals or key workers to find property in the area
The 17th century seaside town of Burnham Market is just a stone’s throw away from the stunning North Norfolk coastline and boasts a number of top-class restaurants.
The average house price in ‘Chelsea on the sea’, a name given to the town because of the large number of Londoners living there, costs £1million.
David Wells, 91, who has lived in Burnham Market for 50 years, supported the crackdown in the Budget, saying higher costs could be passed on to wealthy tourists – and, if it resulted in fewer visitors, then the village would be less crowded.
‘I don’t think that’s a bad thing. If holidaymakers come in from all over the country and rent these cottages, then they’ll just have to charge them more,’ he said.
‘Have you seen it in summer down here? It’s a nightmare to park in the village.’
Pat Cubitt, 57, who rents out six holiday barns in Lower Bodham, near Holt, said the new measures were unfair on people like him who run a ‘proper business’.
‘People who do Airbnb just do it to earn a little bit of money. We have to pay 20 per cent VAT on top,’ he said.
‘To be hit like this as well is unfair. I am sure hotels can charge all their expenses back.
‘We’ve been doing this for about seven years. We use self-employed cleaners and we have a decorator in at the moment. There’s also the laundry. Our business spreads out.
‘This is a bit unfair. We have no other income. It’s completely different when people do it for a little bit of extra money on the side of their full-time jobs.’
Stacey Long, 45, owns a one-bedroom cottage, a flint barn which sleeps eight people, and three two-person shepherd huts on a farm in Felbrigg near Cromer in North Norfolk.
She hasn’t had the chance to work out what impact the Budget will have on her business yet but she already struggles to make ends meet, despite her and her partner both having separate full-time jobs.
The mother-of-two fears she will have to sell up – but no one will buy them now as they are less desirable with the tax benefits disappearing and any change of use would have to be approved by the local authority.
Burnham Market was dubbed ‘Chelsea on the sea’ due to the huge numbers of Londoners living there
Pictured: The Red Hart Inn pub in Bodham, Norfolk where Lauren Mason works
Pictured: Sowerbys Holiday Cottages in Burnham Market
Pat Cubitt owner of Manor Farm Barns in the a living space within one of the barns
‘I probably will be having to look at doing something else now. I cannot see how this is going to work if there are tax changes,’ she told .
‘On the other hand, I would find it very hard to sell my properties because the council will make that difficult. We have had holiday lets in this area that cannot be sold as anything other than a holiday let.
‘In order to try to convert them into residential homes, we’d have to spend thousands and months and months getting permission from North Norfolk District Council. We would have to turn these into residential properties to be able to bring in the income.
‘If we try to sell it as a business, it’s not going to be as attractive to people and that’s hard.
‘Five years ago someone would bit your hand off to buy these but with all the changes they’re not as attractive.’
She added: ‘If we didn’t have the holiday lets in this area, or people coming up to stay, there would be nothing for the local people. The holidaymakers spend the money.
‘I have to have a full-time job as well to be able to manage it all. I work for a medical company. I run all the holiday lets myself and most of the cleaning. I run the holiday lets in my spare time.
‘My partner is a full-time plumber and works six days a week. I work seven days a week all year round.
‘I do not feel I am sponging off anyone. I cannot remember the last time I went on holiday.
‘We have to spend thousands and thousands every year to fix things up in the furnished lets. People have no respect for anything.
‘I live in a house with a roof that needs replacing and windows replacing but I do not have enough money to do that because the holiday lets need the money spent on them.’
Lauren Mason, 23, a bartender at The Red Hart Inn in Bodham, said a huge amount of trade is generated by all the holiday lets and self-catering cottages in the area.
‘With us being the only pub in the village we have a lot of people coming to us from the holiday lets. A lot are recommended through the holiday cottage sites,’ she added.
‘We mostly get a lot of recommendations from previous holidaymakers who have left a review in the visitor books at the holiday cottages.
‘It does help us, especially in the summer. A lot of people like the beer garden and live music. A lot of holidaymakers will come to us in the evening after a day out.
‘I would say that the holiday lets definitely help the economy, especially by helping other businesses.’
Emma Dennes, 38, who owns three Emma’s Boutique clothes shops in Holt, Dereham and Roxham, warned any slowdown in trade caused by holiday lets drying up would be catastrophic.
She said: ‘Holidaymakers in Holt and Roxham are why Holt is what it is and Roxham is what it is, thriving towns, because there are not enough people [living there]. We all rely on holidaymakers.’
Lymington
Retired teacher Antony Mapes, 64, said second homes ‘take away from local people’ in Lymington
Lymington is a yachting hotspot that boasts three marinas and a ferry route to the Ilse of Wight
Stephen Jones, 70, slammed the use of holiday lets in the area as it ‘kills the town’
Residents of yachting hotspot Lymington said the abolition of the tax cut for second home owners will hurt the money generated from tourists, which they are ‘reliant on’, while others welcmed the measure they hope will reduce the price of housing.
According to a New Forest District Council report from 2022, there were 1,608 properties across the area registered as being unoccupied and furnished and therefore potentially second homes.
Lymington was named among Britain’s priciest seaside locations to buy a home on average in 2022.
Sara Teers who works in a shop on the High Street said business is ‘not as good this year’.
She said: ‘We are very reliant upon tourism here. I know that the numbers go up massively when tourists are down here so, if there are less homes for people to come down to…
‘A lot of owners, they don’t live in the property – they just rent them out all year.
‘There’s a small estate agent in town, they have on their books about 90 properties and they are all unoccupied holiday homes that people come down in groups of friends and stay in. That does bring a lot of money to the town.’
According to locals, the New Forest District Council will now charge full council tax to second homeowners.
Lymington was named among Britain’s priciest seaside locations to buy a home on average in 2022
According to a New Forest District Council report from 2022, there were 1,608 properties across the area registered as being unoccupied and furnished
Rick Adams, 62, said it is ‘a positive thing’ that second home owners will no longer benefit from tax breaks – but welcomed the tourism they bring to the area
Another local, Alice Smee, also welcomed the slashing of tax breaks for holiday home owners – but recognised the importance of the tourism they bring to Lymington.
The 64-year-old doctor surgery worker said: ‘I think it should be done quite frankly. If you can afford two houses then you should pay for them.
‘The council announced that they are going to charge 100 per cent council tax from 2025.
‘There’s an argument that if you have a house then you should pay for it.’
Ms Smee added: ‘[Second home owners] do bring people here to spend money in town… there’s good ways and bad ways.
‘We haven’t got many hotels here so Airbnbs are thriving. People like me who live here can be cleaners or be the one who turns it around. There’s lots of opportunities for local people.’
Ms Smee said there’s an ‘interest’ for local people who can manage or clean the properties.
However, resident Stephen Jones, 70, slammed the use of holiday lets in the area as it ‘kills the town’.
The former factory employee said: ‘Second homeowners… we have all complained. We have complained about second homeowners.
‘It just kills the town, it kills it.’
When asked if he supported the chancellor’s announcement, he said ‘I agree with him’.
Matt Ralph, 55, used to own a menswear clothing shop on the High Street but had to close it due to the ‘seasonal’ footfall.
In light of Hunts’ announcement, he said he thinks holiday homes are important for the area but doesn’t believe Lymington will be impacted by the changes.
He said: ‘In this town, you can see half of the shops are closed. It’s so seasonal here.
‘Holiday homes are important for part of footfall. I don’t think it will be too much of an issue in Lymington – there will never be empty properties here.
Residents of yachting hotspot Lymington said the abolition of the tax cut for second home owners will hurt the money generated from tourists, which they are ‘reliant on’
Alice Smee welcomed the slashing of tax breaks for holiday home owners – but recognised the importance of the tourism they bring to Lymington.
Retired teacher Antony Mapes, 64, said second homes ‘take away from local people’ in Lymington and neighbouring Milford on Sea
‘Towns like this are so reliant on that bit or income.’
When asked if he thinks holiday homes are vital to the area, he said: ‘I think so. There are a lot of them. It’s a high tourist area here.’
Discussing the closure of his shop, he added: ‘I owned a shop here for the a while but it was like chalk and cheese.
‘The closure was driven by the fact the footfall is so seasonal.’
Rick Adams, 62, said it is ‘a positive thing’ that second home owners will no longer benefit from tax breaks – but welcomed the tourism they bring to the area.
The former decorator and Boots employee said: ‘I don’t trust Labour, I don’t trust Conservative. I don’t trust him (Rishi Sunak) – our leader.
‘If you want to own two homes, as long as you pay your taxes and it’s done legally then that’s okay… if you have money to buy property.
‘Since I have lived here, a lot of shops have shut due to Covid and no one has had a plan B.
‘You get good tourists who visit but the house prices round here – it’s really taking the mickey.
‘We’re trying to look for a bungalow but we have got no hope to get a bungalow unless I win the euros on Friday.’
Retired teacher Antony Mapes, 64, said second homes ‘take away from local people’ in Lymington and neighbouring Milford on Sea.
He said: ‘I used to live on the quay. I couldn’t live on the quay now… I couldn’t afford to.
‘The prices have gone through the roof – a massive amount of money.
‘When you’re looking at a one bed flat in Milford they start at £300,000… Don’t get me started about the yachties.’
Canford Cliffs
Canford Cliffs is only a short walk away from tourist hotspot Sandbanks
Gareth Watkins, 65, a retired accountant said that everyone wants more homes built
Retired glass maker Mike Tombs, 86, said that the legislation needed to be ‘watertight’ otherwise landlords would find loopholes to avoid paying more taxes
Residents in Canford Cliffs reacted to the government’s controversial plans to scrap tax breaks for owners of second homes
There was a mixed reaction to the government’s controversial plans to scrap tax breaks for owners of second homes and holiday lets in Canford Cliffs.
The suburb of Poole, Dorset, is a short walk from Sandbanks and close to tourist hotspot Bournemouth.
One local resident said the government’s proposal were ‘fiddling at the margins’ and if they really wanted to solve the problem of home supply and ownership they should ‘deregulate and incentivise builders’.
Gareth Watkins, 65, a retired accountant, said: ‘Everyone says they want more homes built but with the next sentence it is ‘not where I live’.
‘Restaurant owner James Hamilton, 52, said he agreed that more needed to be done to tackle the number of Airbnbs and empty second homes.
He said: ‘You do need to encourage long-term tenancies because there are so many Airbnbs and these just drive up the price of rents so local people can’t afford them.
‘A lot of the second homes are bought by people who come down from London and they are empty in the winter, which is not great for businesses like ours.
‘There needs to be a way of restricting the number of Airbnbs but I don’t know how you would enforce that.’
‘Restaurant owner James Hamilton, 52, said he agreed that more needed to be done to tackle the number of Airbnbs and empty second homes
Tech start-up business owner Peter Thornton said that things had gone too far and landlords were being ‘penalised’
The suburb of Poole, Dorset, is a short walk from Sandbanks and close to tourist hotspot Bournemouth
However, tech start-up business owner Peter Thornton, aged in his 50s, who has two Essex homes but was visiting Dorset on his yacht, said that things had gone too far and landlords were being ‘penalised’.
He warned that many had given up having tenants as there are so many hurdles and costs involved.
He said: ‘I know the government have noble intentions but they are pushing landlords to the brink. We have had enough of all these restrictions.’
Retired glass maker Mike Tombs, 86, said that the legislation needed to be ‘watertight’ otherwise landlords would find loopholes to avoid paying more taxes.
He said: ‘If you have got a second home you should definitely be paying more tax.
‘They have got to make the legislation watertight or they will get around it.
‘A bakery owner welcomed the decision to target second home holiday let owners, saying it was justified to ‘tackle the housing shortage which needs to be addressed’.
The woman, who wished to remain anonymous, said: ‘I’m sorry, if you can afford a second home, you can afford the tax.
‘There’s a housing shortage that needs to be addressed and the government should concentrate on building new, affordable homes, not tinkering at the edges.’
A young dog walker, who gave her name as Hannah, said she was ‘concerned’ about the proposals as she uses a lot of Airbnbs, and she believed such moves could have a negative impact on local tourism.
However, a middle-aged woman said she was supportive of the measures as she ‘lives nearby two Airbnb lets and there are noisy parties’.
Retired accountant Jane Francis, 70, said: ‘I agree with the government.
‘My children have got nowhere to live because there are too many Airbnbs.
‘It’s fine if you are renting them out full-time but if it is just for a couple of nights then they should be taxed like any other business.’
Longhirst
Glen and Monica Fahy, who have an Airbnb in Longhirst, said they’d have to double their prices or shut down their business
Longhirst in Northumberland is popular with staycationers since before the Covid-19 pandemic
The small village of Longhirst has been popular with staycationers since before the Covid-19 pandemic but holiday let owners fear they may have to close their businesses.
Glen Fayh, 52, says he will have to close his holiday let if the financial perks are scrapped as his business will no longer be viable.
The owner of Abbey Cottage in Longhirst, Morpeth, Northumberland, said: ‘We are going to have to close.
‘I have no other option. We have four homes that are purpose-built holiday lets that house eight people.
‘They are only allowed to operate as holiday cottages and if this tax relief comes through we can’t open.
‘We couldn’t write off the mortgage interest or gas and electricity bills anymore so it wouldn’t be viable.
‘We charge £500 for a week and we would have to up those prices to £1000 – people wouldn’t spend that, they would go abroad and I wouldn’t try to do that.
‘It wouldn’t be worth our while. We heard this may happen a few months ago and we were hoping it was going to be sweeter than what he announced.’
The business owner also argues the Treasury would not receive an extra £300 million as more holiday lets will be forced to close as a result and that prospective buyers wouldn’t purchase his properties as they are purpose built.
Glen, who has owned the business for nine years, added: ‘We tried to get planning permission to change the homes for long and short term leases but that was rejected.
‘No-one could buy the homes because they are purpose built and large so it wouldn’t solve the issue of people not being able to get on the property ladder.
‘I would just lock it up and leave it stagnant incase the tax system changed again.
‘I’m self-employed through this business but now I will have to find another job, which takes away someone else’s employment.
‘I can see why they’re doing it for places down south that are overrun with Airbnb’s but a national blanket tax reform is unnecessary.’
Airbnb super-host Susan Williams has also hit out at the chancellor’s proposals to scrap tax relief for the owners of holiday lets.
The 71-year-old listed her second property in Southport, Merseyside, on the website after she retired to bring in some extra money.
She charged up to £120 a night for the three bed family home, which was a stone’s throw from Royal Birkdale golf course.
The OAP has recently sold the property and bought a flat in the same area, which she plans to list soon.
The former nurse said: ‘The breaks make a huge difference when you come to pay your tax bill at the end of the year.
‘When I started out, I bought a dishwasher, furniture and other furnishings such as cushions and bed linen to make the house comfortable for guests.
‘But the ongoing costs add up as well. I would provide some food such as bread, milk and chocolates, and a bottle of Prosecco, for each guests’ stay.
‘There would often be repairs and general maintenance. For me, the tax breaks equated to thousands of pounds a year.
Airbnb super-host Susan Williams has hit out at the chancellor’s proposals to scrap tax relief for the owners of holiday lets
Glen Fayh, 52, says he will have to close his holiday let if the financial perks are scrapped as his business will no longer be viable.
Residents of Longhirst have raised concerns that they may need to close their holiday lets
‘These new rules will really make me think twice about listing my new property.’
Susan added: ‘Running an Airbnb is hard work. I did all the cleaning myself to save money. Guests don’t always leave properties how they find them, and it can be tough.
‘Most of the people we had to stay were lovely, but we had some who caused problems with rowdy behaviour.
‘It can be stressful, but it has enabled me to earn money during my retirement.
‘I believe we deserve these tax breaks and that we are contributing to the economy.
‘The industry will lose a lot of hosts as a result of this, which will only lead to a reduction in tourism.
‘Those who continue to list their properties, will be forced to put their prices up.
‘I understand the chancellor is trying to make it easier for first time buyers to get on the property ladder but I don’t feel this is the way to do it.
‘The capital gains tax and stamp duty relief will discourage people from buying second homes, but it will do nothing to make housing more affordable.
‘My husband and I worked hard all our lives and have been careful with our money.
‘We have friends and family in two different areas and wanted a base in both.
‘I don’t believe we should be punished for this. The new tax rules will make it more difficult for a lot of hard working people on modest incomes.’