Whitby holiday lets hit by Budget announcement

Sarah McDermott turns B&Bs and hotels into holiday lets

Holiday home owners hit by tax changes announced in this week's Budget said they were being blamed for a shortage of affordable housing.

Chancellor Jeremy Hunt is to abolish tax breaks and stamp duty relief on second homes.

The change affects property developers like Sarah McDermott who previously had tax breaks on expenses such as fittings for her holiday homes in Whitby.

Generation Rent said they had wanted a better holiday homes tax system.

Ms McDermott, the founder of Maison Parfaite Holiday Homes, said she thought the chancellor's announcement would "prevent growth and investment".

She owns 43 holiday homes across North Yorkshire but looks after 55 in total. She said people like her were being blamed for the shortage of affordable housing in the seaside town of Whitby.

"We're the ones who are creating growth, who are creating jobs, who are doing all those things on his little tick box that he's pretending he's doing up there, but really what he's doing is halting progress," she said.

"The only way to solve the problem is to create zoned areas where you cannot have a holiday home without planning permission, and that basically makes it a lot more exclusive for residents."

Chris Colebrooke, a life-long Whitby resident, said his town was full of holiday homes and local people struggled to get on the housing market.

He said he was "lucky" to be able to buy a home in the town but told the BBC his mortgage was "crippling".

The 28-year-old first spoke to the BBC in 2021 when he was struggling to get on the housing market, something he said was a problem for his friends.

Chris Colebrooke said the lack of community now in Whitby is what hurts

Whitby was the best place in the world to live, he said, and he welcomed tourists but the town needs more affordable housing for its residents.

He works two jobs, a marketing supervisor at Whitby Pavilion and runs a drama coaching school, Colebrooke Productions.

"Myself and my partner have had to take on extra work to be able to afford living here," he said.

"We've cut back on everything you could possibly cut back on."

His grandparents' Whitby home is now a holiday let and the dancing school he attended for 20 years has been converted into holiday flats.

Whitby needs more affordable housing, residents say

He hopes Mr Hunt's announcement on changes to second home rules will change the situation.

"It shouldn't be a privilege to live where you grew up," Mr Colebrooke said.

The two schemes to be abolished are the Furnished Home Lettings (FHL) regime and the Multiple Dwellings Relief (MDR).

For the FHL regime, this means eliminating the tax reliefs for the costs of furnishing holiday lets.

The MDR can mean significant savings for the buyer when purchasing more than one dwelling at the same time.

This is part of the stamp duty land tax (SDLT) legislation.

Dan Craw Wilson of Generation Rent said there should be a licensing scheme for holiday lets

Dan Craw Wilson, of Generation Rent, said his organisation - which acts for private renters - had been campaigning for a better tax system on holiday homes because people were being priced out of the market.

"We've heard from people who have been evicted and then discovered that their previous home has then been listed on Air B&B," he said.

"We've been campaigning for several years to make sure that the tax situation for holiday lets matches the tax system for private rented homes.

"In Scotland they've got a licensing scheme, we should have a licensing scheme in England as well for holiday lets, so that if a local council sees that there are too many homes made available for holiday makers, they can step in."

Generation Rent estimates that 36,000 homes have become second homes and/or holiday lets since 2019, based on council tax and business rates data.