Increased governance and costs for landlords of holiday/short-term lets

Landlords who currently operate short-term or ‘holiday’ lets should be aware of the changes Welsh Government are due to introduce in the near future. One of them has already come into effect, which is seeing landlords of such properties pay significantly more council tax.

1. New registration and licensing scheme for visitor accommodation

Short-term rentals were previously attractive to some landlords due to having less strict regulations, but this is changing. Welsh Government have announced a new registration and licensing scheme for all short-term rental properties in Wales. Encompassing everything from AirBnBs to hotels and caravans, these measures aim to ensure a level playing field between short-term and traditional rentals, whilst driving up the standard of short-term accommodation.

The scheme will be rolled out in three phases:

  • Registration: All visitor accommodation providers will need to register, providing details like ownership, location and how they operate.
  • Safety licensing: To operate legally, owners will need to obtain a license confirming that they meet specific safety standards. There will be a fee for being licensed, which will need renewing periodically. If it’s anything like Rent Smart Wales’ licensing process (which we expect it will be), there will probably be mandatory training required too, which could come at a cost.
  • Quality licensing: This will add quality standards to the licensing, so is likely to mean the introduction of minimum safety standards. Whenever there’s a push to improve quality and safety, it inevitably comes at a cost to the owner, as they will need to spend to meet the new standards.

2. Increased council tax for holiday homes

On 1st April 2024, Cardiff Council implemented a new policy that affects second homes and furnished properties not being used as someone's main residence. Owners of such properties now pay a 100% council tax premium, so their total bill is 200% (i.e. double) of the normal council tax bill.

We’ve already had a number of ‘holiday let’ landlords approach us to advise that they’ve received letters from Cardiff Council saying that their council tax bill is doubling. The increased cost is too costly for them, so they’ve decided to come away from short-term accommodation and instead go back to the traditional, long-term lettings market.

3. Possible introduction of tourist/city tax

Many of us have checked out of a hotel abroad and been hit with the “there’s just the city tax left to pay” line. Welsh Government are considering introducing a visitor levy (tourist/city tax) for Wales. Whilst not yet implemented, landlords operating short-term rentals will be expected to collect this levy from their visitors, then pass it on. This means landlords are forced to take home less, or they increase their asking price – which could put some visitors off.

Could a switch back to a long-term rental be right for you?

We've already helped some landlord clients switch back to the traditional rental market following these changes, and we anticipate that many more will follow suit. Shifting back to traditional long-term rentals offers several benefits for landlords, including:

  • Reduced management: Long-term lets generally require less management and administration compared to short-term lets. The fewer changeovers in occupants you have, the less time needed for managing individual stays.
  • Steady income: Renting your property long-term unlocks a stream of steady income, boosting financial stability and security. Additionally, the risk of prolonged void periods is significantly lower.
  • Reliable contract-holders: With a property management agency like ours, you can find reliable, screened contract-holders who will care for your property.

Working with professionals will provide peace of mind throughout the process. If you want to be more hands-on with long-term renters, you can be – we’ll have a service to suit. Alternatively, if preferred, we can provide a fully managed service and do most of the work for you. Find out more here or get in touch on 02920 454555 to explore your options.

26 April 2024

The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.


Posts by date

Sign up for updates

By using this form, you agree with the storage and handling of your data in accordance with GDPR for the sole purpose of communication. We respect your privacy and will not share your data with third parties. For more information, please view our Privacy Policy.

cwtch tile