Local Government and Housing Committee

Okay, just to kick us off, then, Chair. It's a very, very useful report, I have to say that. It does say right at the beginning, though, that the author hasn't been able to do as thorough a job as he might have wished to do, but nevertheless, what's in there has been very useful. From my perspective, or at least on behalf of the Wales Tourism Alliance, it does distinguish between second homes, businesses, and those second homes where casual letting occurs, which I presume is one of the areas that's of most interest to this particular committee.

Yes, okay, Suzy. And I see Shomik, I think, has indicated as well.

Yes, thanks very much. Bore da. Thanks for having me on. Just to agree with Suzy in that it's a great contribution. We'd just like to add that we believe that the economic impact of holiday lets shouldn't be underestimated. There hasn't been that much data out there on this previously, and I think a lot more work probably needs to be done here. Some additional information that we have is research conducted by our members. And perhaps, just to draw the committee's attention to an independent study by Oxford Economics on behalf of Airbnb, which estimated that guests on the platform contributed a total of £107 million to the Welsh economy in 2019, and that for every 1,000 Airbnb guests who visited Wales, Airbnb estimated that they supported four jobs, including two in restaurants and one each in retail and in entertainment. And furthermore, every 100 listings are estimated to have directly supported seven jobs. So, there are just a few bits of supplementary information that we would like to make you aware of.

Okay, thanks very much for that. Any other witnesses. Yes. Sam.

Thank you, Chair. I think it's important to note that in the terms of reference in Dr Brooks's report—while it is a great document, he does specify that the terms changed over time to put more of an emphasis on that economic impact. So, while he initially set off looking at that residential part of the market, the planning and taxation element, there wasn't from the outset that greater focus on the wider economic impact. So, I think, as Shomik mentioned, there are a lot more economic areas to investigate and there's a lot more data out there as well that be incorporated into this inquiry.

Okay, Sam. Thank you very much. Any other of our witnesses on—? Yes. David.

I think it's important—. Simon's report is really impressive, I think. I've known Simon for a long time, and I know he's not only thorough but committed to this work. I think the important thing from our point of view is to not segment or to try to look at issues like second homes without a very broad and thorough look at the much wider economy that's involved in it and to look to try to find holistic solutions that are involved in defending and improving the economic value of the industries that support an awful lot of local people in the communities that are being discussed, while making it easier for those local people to be able to buy houses and live in that area because they're an essential part, clearly, of our industry. And I think that this raises a number of paradoxes and some contradictions that occur, which I think have been highlighted by Simon in the report, about how we have to try to weigh up solutions to address the different issues while not harming any other elements that are involved in that equation. And I can see that the committee has got a really difficult job in trying to make that work, but we're here to help, certainly, on the side of looking for a solution that not only is economic, but is environmental and sustainable and one where, hopefully, if we all work together and get the right answer, we can put Wales in a leading position, not only in the UK but in the world on these issues.

Thanks very much. Suzy.

Just briefly to supplement that, the committee may already be aware of this, and I only raise it to ensure that we avoid one of these conversations about babies and bath water, tourism in its wider sense already employs 12 per cent of the Welsh workforce and contributes a considerable amount to the economy—8 per cent directly and 13 per cent indirectly. So, in considering the economic impact, the benefits of tourism need to be brought into the equation. Thank you.

Okay, Suzy. Thanks very much. Okay, let us move on now to another fairly general question, which is: do you feel confident that you're sufficiently aware of Welsh Government's objectives with regard to this work? The Welsh Government has settled into its thinking, I think; we've got pilots and so on. So, it is sufficiently clear what Welsh Government's objectives are in addressing these issues of second homes and short-term holiday lets? Are the objectives clear enough? Sam.

I think from RICS's perspective, it's not as clear as we would like. We've just discussed wider economic impacts of second homes and holiday lets, so are we looking at the wider economic and tourism industry in Wales, or, if you were to take up the Brooks report as it is, are we reading it to be—? Is it a deterrent on second home and holiday lets? Is it seen as an extra revenue generator from second home and holiday lets, or is it about supporting local communities already in place, helping them with getting on the housing market? That's what, from RICS's perspective, we've struggled to understand what exactly what the Welsh Government wants to get out of this investigation into second homes, and what their policy priority should be.

Okay, Sam. Shomik.

[Inaudible]—what Sam just said. I think a couple of things come through in the sense that our understanding is that the Welsh Government's main aim is to stabilise the number of second homes and to reduce them over time. We also understand that the Welsh Government wants to introduce a degree of local flexibility into future policies in recognition of the local impact of second homes and holiday lets, and to ensure that the benefits to communities are fairer through regulatory intervention. But we think also that the Welsh Governments needs to be a bit clearer in terms of what it wants to achieve with respect to second homes, and what it wants to achieve with respect to holiday lets. The two issues are quite separate and shouldn't be confused. Taking punitive steps against short-term lets is not necessarily going to reduce the number of second homes, but it could deprive local communities of tourism-related income, and we don't, for instance, feel that a diminution in supply of holiday lets would be beneficial to the Welsh economy. We think, therefore, the Welsh Government should clearly articulate what it wants to achieve with respect to holiday lets, as well as second homes.

Okay, Shomik, and Daryl.

Yes, I'm kind of echoing what Sam's view is on this as well from our perspective. I think there are a lot of questions that probably need an answer, starting on the definition of what's a second home, what's a short-term let, what's a holiday let. Is the issue localised or national? And the report suggested that it's a localised issue, but what is the end goal? Is it to provide—? Is it to ensure tourism remains in the country? Is it encouraging home ownership, or is it to ensure there is a home for everybody with the lack of available housing at the moment as well? So, I think there are a lot of questions there, and then you go down to the tax issue, the tax side of things as well, and taxing. Are these businesses—? I think there's just a lot of questions that could be answered. I think we have changed over time, some of these policies and regulations that go back for second homes and go back to 1988 for the Housing Act. So, it does need a bit of updating, moving with the times. The advent of these platforms where people now want to holiday in other homes, it's just snowballed over the last 10, 15 years, and so has the available accommodation. So, I think everything would have to be considered and looked at, and to find out what the end objective really is, and what they are trying to encourage.

Suzy.

There's a confusion and clarity, she says helpfully. I think it's clear that what Welsh Government is trying to do is to get to the bottom of what a balanced community looks like, and recognises—as indeed we do—that the balance has gone wrong in some communities, primarily in the north and west. That's not true, of course, for the whole of Wales, and there's some anger in the self-catering business sector that they're being dragged into conversations for bits of Wales that aren't really affected by the problem that's trying to be solved here. There's also a recognition, I think, that the status and presence of the Welsh language in certain parts of Wales is, and rightly is, a focus. Again, that plays differently in different parts of Wales, depending on where you are.

But the main objection that I think we have to the way that these consultations are being conducted is this conflation between letting businesses and the casual lets that sometimes occur through second homes or are bought to be casual lets, and the external narrative that occasionally goes around that. Tourism is one of our major industries, and there's been a level of damage in some communities where I'd say businesses have been conflated with casual letters, which is to the detriment of the residents in the community who naturally resent this, and also to bona fide self-catering businesses who are being dragged into the same perception as the casual letting activity, which isn't regulated and where there's no quality control.

Okay, Suzy. Thanks very much. Anybody else on this in particular? David.

Not to take up too long, thank you, Chair, but it's a much bigger issue really than perhaps should be considered under maybe the banner of one committee. I think that there are lots of issues here where we need to look at it to try to develop, as I said in the first part, a holistic solution that would help take the economy and our culture and communities forward together. Just to look at a few simple issues, for instance, if you're looking at a localised policy within regional solutions, then there's obviously the danger of displacement that that will create in certain areas, which might just be simply moving the problem around or inheriting it into other areas. And then we're also looking within this committee about things like counter-urbanisation. Policies such as working from home influenced that as well in areas like city centres, where we are finding now that lots of properties in city centres are becoming available for rent after the COVID pandemic, and that affects our businesses in those areas because of footfall.

So, this is a really, really big, wide issue that is not simply about the housing stock or simply about communities and language, but it's also about providing jobs for those people, looking at the trends that we will have to adopt and follow in the next five to 10 years as a result of Brexit and COVID, and also demographic changes. So, it's not really easy, and I can understand why there are contradictions in areas where you can't find, at this stage, a definition for second homes, and Dr Brooks couldn't do that. That's integral to this, before we can go any further, and the effects of other areas that I'll bring up later, like houses of multiple occupation.

But it doesn't mean to say that, together—maybe not very quickly, but together—we can't provide a solution to that. But it does involve, first off, a recognition of the huge economic impact that the industry makes. And I would make a point for hospitality in this because we have members in self-catering and others, but the vast core of our members are building based, and we provide services into those areas and we employ local people and we keep those communities not only thriving economically but thriving socially in community terms, and certainly help the culture and introduce visitors to the culture from those locations. So, all of that needs to be taken into account while considering this wider issue.

Okay, David. Thanks very much. A final question from me before we move to other committee members, and really this is about process and the scale and the pace of the consultations and interventions that we've seen up to now from Welsh Government, whether it's on taxes or planning or on Welsh language aspects, and, of course, the Dwyfor pilot area. Do you consider that process so far, the scale and pace of it, appropriate, or do you have any concerns? I think I saw Suzy first and then Shomik. Suzy.

Okay. Thank you. What I would say about this—. Obviously, there's a flurry of activity at the moment because it's a policy area that's of great interest to Welsh Government and, indeed, certain parts of Wales. I think my point would be is that you need a really long period of time to assess whether existing policies, such as the council tax premium, are having any material effect on the policy area that the Government's interested in at the moment. And my worry is that, actually, some of these, even the pilots in Dwyfor Meirionnydd, may just be too short in their length of time.

Okay. Thank you, Suzy. And Shomik.

On that, I think the fact that there are several different consultations happening very quickly can be a bit confusing for industry operators to keep up with. It could therefore be helpful for us, or for the Welsh Government, to produce a comprehensive overview of its plans in relation to short lets. We also question whether all of the different regulatory options being considered need to be deployed at once. And this goes a bit to Suzy's point a moment ago—there needs to be a bit of time to assess what the situation is, look at the evidence, and then come up with the right policy prescriptions to whatever the policy problems are. So, it may be better for the Welsh Government to introduce one set of changes and assess their effectiveness before it makes further changes. But whatever, ultimately, the Welsh Government decides to do, I think it's going to be very important that they communicate any changes in the rules clearly so that operators have the time to understand and prepare for those changes long in advance.

Okay. Thank you very much. Sam.

Thank you. Echoing the last few points that have been raised, certainly, I think the duration of a lot of what's been investigated or proposed needs to be taken into consideration. One example from Dr Brooks's report is about small businesses and the removal of small business rates relief. That's not something you would be able to assess within one year; that's something that will take a number of years to properly determine what its impact is going to be. But, likewise, we've seen a seismic shift in the housing sector in the last few years—COVID-19, working from home, growth in staycations—so we're still not quite sure what a long-term housing view will look like in the market. I think we've also got to factor that in. But I will also say—and the committee, I'm sure, knows well—that, when we talk about planning reform and we talk about taxation reforms, these are things that take years. So, using what policy levers we've got now, such as the pilot scheme in discussion, I think is a good first step and is something that, yes, if done correctly, like Suzy mentioned, in terms of making sure it's done at a suitable length and that suitable time is given to analyse it, is a good first step.

Okay. Thank you. Any other concerns on the process up to now—scale and pace? No. Okay. Let's move on, then, to some further questions, and Mabon ap Gwynfor. Mabon.

Good morning, everyone. Thank you, all, for joining us this morning. May I ensure that the interpretation is working? I see that it is. Excellent. So just on that final point, as a Member representing Dwyfor Meirionnydd, our communities are telling us that time is against us—they see communities emptying out and the impact of house prices is being felt now. So there isn't a great deal of time for our communities. But addressing the point that Daryl and Shomik raised, and which you all have referred to, namely this very interesting issue of the definition of what a second home is—whether it's a holiday home, or a short-term holiday let—could you help us through offering your own definition of what the difference is between these elements? Is there one kind of holiday home that is more beneficial economically, or one kind of holiday home that is more damaging culturally and environmentally?

There's a challenge, Daryl.

Yes, thank you for that. I'd love to have a straightforward answer to that question, but I think if you're considering—. I suppose the key word is 'home' isn't it? Is it somebody's home? And Sam, again, just mentioned there the work from home element and that we're now introducing a hybrid model for some people to work from home. So, does that give them the opportunity to have, effectively, two homes? Can they be based somewhere and have another property that they may live in or spend longer weekends there that they would consider it a home, or get back to the office in the city centre during the week—that's a home?

If you're looking at somebody who's inherited a property from a deceased family member, they've then got a second property. Is that a home? I wouldn't call it a home, but, again, if there's no clear definition, you're looking at that as a second home, but really it's a property, and what do they intend to do with that? And I think there's a bit of focus on empty properties at the moment with the number of empty properties that are out there. I know the empty homes grant scheme is under way, but making that available or the knowledge of that for people with empty homes to bring these back into availability, whether it's for the buy-to-let for the rental sector or, again, for home ownership—.

The short-term holiday lets, are you again looking towards that as a business element and for what somebody is looking at and intending to do with their property that way? So, I would love to have a straightforward answer for you, Mabon, but I think it does need a lot of work, a lot of discussion, a lot of regulation. But I think with regulation there needs to come enforcement as well on all of that to make sure that how people are using their property is how they've declared, I would say.

Shomik.

Thank you, and thanks for the tough question. We think the distinction between first and second homes could be relatively straightforward in the sense that a home should be where someone is resident for at least more than half the year—i.e. 183 days or more; that's a primary home—whilst a home where someone is resident for less than half a year should be classified as a secondary home. But we do think that primary homes and secondary homes—i.e. homes that are lived in for some portion of the year by their owners—should be allowed to be short let as part of a mixed use category, because those homes would not be able to be released into the long-term rental market otherwise. They are being lived in for some portion of the year, and it's better to make use of those homes rather than allowing them to remain empty when their owners are not there. So, we feel that short lets should not be treated as a category on their own, but rather we should look at the nature of their use. There's an existing precedent for this in tax law. Any home that is let out for 140 nights in a year or more we believe should be classified as a business, as is the case in tax law, and they should be subject to business regulations, business rates et cetera. And homes that are let out for less than that should be classified as homes irrespective of whether they're primary or secondary homes, for the reason I mentioned. Those homes would otherwise never be available on the long-let market as they're lived in for some portion of the year, often for good reasons, either because people have seasonal jobs, or because they're retired and live in once place for some portion of the year or another, and rather than allowing those homes to be empty for that portion of time, it's a better use of those homes for people to be there and for guests to be contributing to the local tourism economy, and for jobs and growth et cetera to follow.

Now, it may be appropriate to control the number of commercial short lets—i.e. 140 nights a year or more—in areas where there might be housing pressures, as you're talking about, and there might be some work there in terms of making sure that—. One thing I want to be very clear about is that there's a very good use case for all of these types of short letting. There's a need for commercial short letting in areas where there's tourism to make sure that you've got the right tourism stock, and there's a need for amateur short letting to make sure that homes are being used efficiently and you're not having to build more and more homes just to try and keep with the demand for housing. So, all of these cases, we believe, should be allowed to exist, but there may need to be controls on that commercial side, if you're worried about areas, and urban areas in particular, where there might be housing pressures, where there might be people who are struggling to get on the ladder. All that we would ask for is that, in those instances, authorities provide the right evidence that there is pressure, and then certain additional controls could apply.

Shomik, that's very useful, thank you. Suzy.

I think I need to come in here, because the WTA has a slightly different view of this. Just to clarify as well for Mabon ap Gwynfor, the point I was making is that the proposals and the attempts to resolve the problems is what needs the long time to see whether it has worked. I wasn't trying to say that the problem has only just occurred very recently.

On the point that Shomik Panda was making, we don't consider that the commercial business short-term lets are the primary issue in the housing problem discussions. It's this new surge in the casual letting of existing domestic properties that we think is putting the pressure on some of these communities that we're talking about here. We agree in the sense that it's not that that activity shouldn't exist, but a clear distinction needs to be made between commercial lets and the use of properties casually for letting. I've referred before to the issue of standards and also knowing where these businesses are.

It would be difficult, I think, to make the case that communities are swamped by commercial lets, which provide long-term benefits to communities in the sense that there are sustainable jobs and definitely secondary spend. Then there's this kind of sporadic unregulated market, which is where the growth has been, which is domestic properties that are being casually let and not being made available for private rental—although I agree that not all of them can—and are actually creating a situation where property owners who might be in the process of thinking, 'Well, do you know, I want to sell up and move out of this area now' decide to hang on to property in order to let it casually. So, there is a distinction between the existing business regime and casual letting, and it's this grey area that I think needs the main focus for resolution. Thank you.

Coming back to what Daryl mentioned about making sure we're not accidentally incorporating homes as second homes, something like inheritance is one. Another area to consider is somebody who's actually moving into an area from outside and, for whatever reason, the home buying and selling process for them has stalled. We know the state of the current housing market is very fragile and things are moving very quickly, but a typical home purchase and sale in a chain takes six months or more. You need to make sure something isn't inadvertently being classed as a second home while the good intention is that they are wanting to make that their primary residence.

I think that it's also important, just from a definition perspective, to note two points. One is understanding specifically what types of property we're talking about. When we talk holiday lets, for example, are we talking bricks and mortar kind of properties or are we talking, for example, large static caravans? That's something that needs a clear definition as well, because they do make up a significant proportion of holiday lets in different parts of Wales. And finally, as well, the need for the definition to be a universal Wales-wide definition. We talk about, and Dr Brooks mentioned, the need for a localised and regional approach. That is great, but I think that only works if there is a consistent definition of what a second home and holiday let is, implemented at a national level. I think that's important to make sure.

Just to pick up on a couple of the concerns that Suzy mentioned, first of all, in terms of—. Suzy mentioned a number of times that the amateur end of the short-term letting market is unregulated. I'd like to just challenge that assertion, because you'll find that those who are letting their homes on a short-term basis, on an amateur basis, are subject to relevant health and safety, fire regulation, tax regulation—there is a whole suite of regulations that they are subject to. So, it's not an unregulated sector by any means. Maybe what Suzy is referring to is that there is no specific short-term rental regulation beyond those, but it certainly is a regulated market.

In terms of the amateur class itself, I think the point I would make just simply is that those who are doing this on an amateur basis are living in those homes. Simply, if they were not allowed to short let, those homes would be left empty in the moments when they're not there. It can be a really good source of income for some hosts when they go away for a couple of weeks in a year. If they're going on holiday, often they can afford their holiday. It's really good supplementary income. So, there are some very good benefits for people who are just able to do this on a casual basis from time to time, especially in times like this when people are struggling, obviously, with the cost of living et cetera. Going back to the point I made previously, which I think is the main point, those homes could not otherwise be put onto the long-term rental market, so those homes absolutely would have no impact on local housing or local housing supply. Being able to allow them to short let would have zero impact on that. Therefore, I think the policy solutions must be really focused on those in other areas, because these are not the problem. This should not be the problem bracket.

May I come in at that point, please, and just challenge a little bit what Shomik has said? Forgive me, David, I'm sure that you wanted to come in in a moment as well. Perhaps that is the truth in theory, but if you were to go to Abersoch, to Aberdyfi, to Dolgellau, to Criccieth, or any town or community in my constituency, there are streets being bought up as investments that are let on Airbnb or Vrbo. There is no regulation. People buy them as an investment—they're not businesses that are regulated as businesses. There are streets of them literally being lost to the local market. So, lived experience is different to the theory, and I can tell you now it's not people facing a problem in terms of cost of living who are buying these houses, but people who already have enough money to buy these houses as investments for Airbnb. So, is that a good thing? Is the fact that a few people derive economic benefit beneficial, do you think, to the wider economy, or is it damaging to the local community and local culture, going back to that original question I asked?

Shall I come in?

Yes, please, Shomik.

Thank you for that. I totally understand those concerns. I think it's that sort of 'buy to commercial short let' class that might well be causing some angst and worry, and I think that may have been exacerbated recently by tax changes on the purchase of second homes for the long-term rental market as well, and the differences in terms of tax treatment of long-term lets versus short-term lets, which may want to be looked at. But actually, I don't really disagree with what the Member was just saying, in that those homes that are maybe being bought up to be let out commercially are investments, and maybe they should be treated slightly differently to those that are actually genuine homes that are lived in by their owners, either as their primary residence or for a good portion of the year. If they're living in it from some reason, then they're not obviously pure investment properties. So, segregating those that are living in those homes from those that are being bought up for commercial purposes, I think, is a good idea, and then, if there is an issue with housing in certain tourism areas, you might be able to apply certain levers, if the evidence is there, afterwards. So, I think we're not totally disagreeing here. I think that the categorisation that I'm trying to picture would probably allow the Welsh Government or local authorities to also take action if necessary, if there are certain pressures.

Thank you very much.

I think David, as you said, Mabon, would like to come in as well.

I would. I don't feel qualified to be able to give you any definitions on the second homes side, and if Dr Brooks is not capable of doing it in the report, then I'm just not there. But what I wanted to make the point about, I think, is economic contribution. It would be helpful if the Welsh Government had some detailed analysis on the economic contribution of our industry to be able to not only assist this argument, but also to assist in future going forward with the economy planning, and to show just how important we are as an industry to the Welsh economy, as probably now its primary source. You just have to look at what happened over the last two years and the devastation that occurred when our businesses were closed to local communities and to local employment to understand that there is clearly a lot to that.

I'd like to flag up as an example the position that the industry, having come from that really terrible position that we had, is now facing in April, and I think this is something that will reflect across the different categories of businesses. If you have, for instance, a hotel in a coastal area, in April you will be dealing with high food inflation, high energy inflation, business rates returning to 50 per cent, you will be having national insurance contributions increased, and VAT returning from 12.5 per cent to 20 per cent, on top of the fact that you've had two years with no cash reserves whatsoever—they've all gone. You're repaying loans, and you're desperately trying to bring back a customer base that is used to not going to places and not going to pubs and various other hospitality outlets. During the period of COVID, not all parts of the industry have suffered in quite that same way, and what we really need to do is to look at where the assistance and where the job creation elements and the job sustainability elements reside, as well as the cultural and community impacts and the economic impacts on a long-term basis, particularly with static businesses, and to analyse that and to see exactly what we've got, and the pound-per-visitor spend.

If we look at all of those contributing factors, we're then in a position to develop a sustainable tourism and hospitality programme that will be able to look at how we can restrict numbers where there may be fears of too many visitors—for instance, Snowdon is a clear example; measures are already being taken, I can see there, to help—if we all want to contribute into that. We want to analyse where the pound goes and where the value is and not to underestimate it or to in any way possibly damage it as a result of not knowing the full detail of the benefit that it provides to communities.

Shomik again.

Thank you. I'm sorry; I realise I've already spoken, so I'll keep this brief. I thought that intervention just now was very pertinent, it's correct, and it made me also think that there needs to be a clear understanding as to what is contributing to the housing pressures in local areas. Because it's quite convenient sometimes to just focus on tourism or short lets, but the reality is that in most communities right across Wales and the UK, housing pressures have been building up for many years, mainly because of a lack of house building, and that's probably the primary factor that's at play here. But there are other potential contributory factors that obviously need to be looked at, and if we look at all this in the round, we'll be able to make the right policy prescriptions thereafter.

The other thing I would say, going back to the Member's point a moment ago, is that a registration scheme would help us understand what the scale of the activity is around short letting, and really see who's doing it, how often, so that we can capture the data and then come up with the right prescriptions. What we have seen in other places is that a lot of policy interventions have been made—such as in Scotland; we'll come onto that later—where they've not really had a look at any of the data and quite restrictive policies have been put in place, which effectively have killed off the market and probably will have quite a big negative impact on tourism at this particular moment. So, making sure that we capture the data first is a critical point.

I'd like to finally just say that if there are people who are buying up lets and operating them as businesses, I should have mentioned that, as an association, we absolutely believe that those people should be classified as businesses, paying business rates and paying their fair share. And a registration scheme, again, would help with that, because it would identify who should be in that category and authorities would be able to see if people are paying their fair share of taxes. Thanks.

Okay. And we've got next Suzy.

Yes. Can I just reinforce that last point? The statutory registration scheme would not only help with data gathering, but it will really put the thick black line between commercial lets and the grey economy, if you like, of some of the casual letting. I think that's a critical point because it will help with destination management for tourism, but it will also help local authorities understand the sources of their income. It will also help, of course, HMRC know who should be paying tax and perhaps isn't. It'll also help with the current practice of flipping between a domestic status and a commercial status in order to take advantage of either council tax or non-domestic rates, whichever is the more beneficial. So, I definitely want to reinforce that point. But, actually, the economic impact in the community of anything is important in trying to establish its viability in the first place.

Okay. Thanks, Suzy. David.

Just quickly, our written submission is supportive of statutory registration and the arguments for it. I think one thing to take into account with that is the benefit that, with a proper knowledge of where businesses of all types are actually contained, we would be then able to maybe address some of the anomalies and, well, unfair practices within the business rates system, for instance, where our businesses are increasingly taking a bigger and bigger share of rates in areas, when internet businesses are not having the same, and out-of-town businesses are not reflecting it in quite the same way. And so, if we were able to get a genuine picture of all the businesses that are operating in Wales, we might be able to find a more level way of being able to tax people, tax businesses, in a fairer way.

Okay, David. And Sam.

Thank you. I think it's just important to highlight what clear definitions can and can't do. I think definitions will certainly help with what people have discussed so far: the taxation elements and the planning elements of it. From an RICS perspective, I think what's important to a lot of communities in Wales is actually the valuation, the value aspect of properties, and, from an RICS perspective, we calculate property valuations based on stock versus demand, based on market movements. Having clear distinctions between a holiday let, a short-term let or a second home won't really influence valuations that much unless there are significant taxation purposes on that individual property, mostly because it goes off, as I said, the stock versus the demand. So, the definitions won't help communities in that valuation aspect. I think that's important to get the message across.

Okay, Sam. Thanks very much. David.

Sorry to come back, to keep popping in, but I think it's also—. I wanted to flag up the importance of statutory registration and recognition of where businesses are with things like the possible introduction of a tourist tax as well, because I think, if that's to be effective, it has to be representative.

Okay. Okay. Well, thank you all very much. Thanks, Mabon, for that particular area of questioning. We'd better move on, then, to the committees. Sam—Sam Rowlands.

Thank you, Chair, and good afternoon—morning—everybody. Time flies—not so much. I really appreciate your time this morning. I just want to focus a few questions on some of the policy decision making and where that should sit. I'd be really interested to hear your thoughts on where policy decision making should sit. Should it be at a very, very local level—town and community level—county level, regional or at a national level in terms of the some of the decision making around this? That's the first element. And then the second element, in terms of managing that policy or enforcing that policy, where should that sit as well? So, I'm just wondering what your thoughts are in terms of helping to manage this, whether it should be Welsh Government setting these policies or perhaps at a more local level.

Sam—the other Sam.

Thank you. RICS have argued that, yes, as Dr Brooks highlighted as well, there is a need for a local and a regional approach to this. I think, going down to that ultra level, to community councils, for example, or basing it on very specific ward data, you've got to factor in that that will take an incredible amount of resource, particularly on overstretched planning departments already. What I would argue, going back to the issue of definitions, is I think it's important for the Welsh Government to create succinct definitions of property types and that will help any local or regional policy deviations to be implemented. I think there also needs to be consistency around trigger points as well. If local schemes, local taxation schemes or pilot programmes are introduced, there needs to be a universal percentage point of housing stock being moved into second homes or holiday lets, just to create more fairness across communities.

Okay. Suzy.

Yes. In terms of definitions or the content of any statutory instruments or, indeed, primary legislation, that needs to be consistent across the whole of Wales. I think if we're talking about local application of national rules, if you like—obviously, we're talking about powers rather than duties to use these rules—then, because we don't have a localism Act, the point at which decisions could be made about implementation would be at local authority level, and it would need—. My view is that you would need, alongside the introduction of any legislation, primary or secondary, at least some draft guidance to help local authorities decide how they're going to implement the powers that they're going to have. The reasons for local authorities to want to use any powers locally will be slightly different everywhere. But, to have consistency in the application of law, I think you'd need that draft guidance to accompany anything that comes in in terms of proposals encapsulated in legislation.

There we are. Thank you, Suzy. Anyone else? Yes, Daryl.

Yes. I think there has to be the framework, starting with the Government, and then local authorities being allocated powers. I think everybody realises that it's not a one-size-fits-all, so, throughout the country, you can't have a national policy; there needs to be some kind of flexibility, I would say, and local authorities being handed these powers. Enforcement also is a must, and I've mentioned that before, and resources would have to be allocated to local authorities to carry out enforcement when regulations are introduced as well. And property standards should be—. I think it could well be all property types regardless of what the property is being used for, and I think that seems to be a bit unreasonable for those that are in the long-term market, particularly with the new fitness standards that are going to be introduced in July. I think that's edging more people towards a short-term holiday let, the fact that there's a lack of regulation in that sector, or the properties don't have to meet the standards there as well, so they can easily go to short-term holiday lets as well and think that that, perhaps, is an easier win on that side. So, yes, I think you have to start at the top and then offer local authorities relevant powers.

Okay. Thank you, Daryl. And Shomik.

Thank you. I pretty much agree in the sense that we think there needs to be quite a lot of national involvement and that policy should be, generally speaking, made and implemented at that level, because it makes it much easier for operators to comply with the rules and regulations. We've seen in Scotland, for instance, where they've gone down the route of licensing, that each local authority will have a different licensing system, different powers, different fees, potentially, for their licences. And this becomes very difficult for operators to understand and for users and hosts to comply with. The market can also vary quite differently from region to region, which might lead to market distortions, housing market distortions, if taken to the extreme. Having said that, we accept that there may be instances where, obviously, local solutions are needed to tackle local issues, but starting with that national framework and having good national involvement in terms of guidance, and also the national Government holding local authorities to account when it comes to an evidence base before they introduce certain local measures, is really quite important.

So, our preferred approach is for a national-level baseline accompanied by optional additional measures—again set at the national level—which can be applied where there's clear evidence of their need. And in such cases, local authorities should have to present evidence of the necessity of additional measures and seek permission from the national authorities. A good example of this could be like a national registration, a nationwide registration scheme, that allows for additional controls on short lets in areas with a proven level of saturation of short lets.

Okay. Thank you, Shomik. Thank you very much. Sam—Sam Rowlands.

Yes. Thanks, Chair, and thanks for those responses. So, I think it was Sam, actually, who mentioned the consideration of tipping points within communities and then where policy would help mitigate some of those risks of communities going over that tipping point. I'm just interested to understand what you think should feed into—. So, if there is a percentage set—I don't know, a random number, 20 per cent, say—as in second homes, under whatever definition is created, what are the considerations do you think that should be put into that tipping point in terms of the economic impact and the impact on the local economy? Do you want to expand on that a little bit?

Who would like to offer some thoughts? I can see David. David.

Okay. I think we're starting from the wrong place, Sam. I think what we need is the information in detail about economic impacts and the statutory registration scheme, so that we know exactly where and how, what the position is, and then we can start to address the solutions to it. And to double up on the first question, I think it has to be a far-reaching and new approach to looking at our industry and how important it is to Wales. And I think that that has to be done at national level, because we're one of the rare industries that actually crosses over nearly all areas of policy that are within the Senedd's jurisdiction. We've got housing, economy, environment and sustainability, rural affairs, health and well-being, finance. And also we ought to be considering a unified food and drink policy with hospitality in those areas, as a key indigenous industry. And all of that is a big economic ask, and it needs the information at our disposal to be able to make those decisions, particularly when it comes to things like any consequences to do with taxation or realignment of taxation. So, the real answer, I think, has to be that we've got to get as much information together as we can, so that we can understand and define, on the back of that, and not try to speculate at the moment, which can only lead to imbalances, whether it's at a local level or at a community and sector level.

Yes. And Sam—Sam Rees.

Thank you. Yes. Thank you. Echoing what David said, yes, the need for more economic data—. Sam, Sam Rowlands, was talking about what is that tipping point, what's that trigger point here. It's very easy to set a percentage figure for, 'Yes, local policy deviations can be implemented at 20 per cent second homes'; that's a very easy quantity of figure to put together. Economic data is a lot harder to analyse and understand what is that tipping point there. And likewise, from the Welsh Government's perspective as well, they're very focused on that cultural element and whether or not you need to look at a cultural tipping point, and that is a lot harder to quantify, I think. But also to factor into this tipping point, when it starts having—the number of homes starts having—a negative effect on communities, I think it's important to understand, and there's not really data out there, what do local communities actually want from their housing needs, from their local economy. A good example: a lot of these areas are rural or semi-rural areas that have high percentages of second homes. Is the intention to get younger generations back into these communities—first homes, for example—or are you seeing a shift where these generations are moving into larger towns, cities, for new job opportunities? I think until we understand exactly what a local community needs, it's a lot harder to understand exactly what a tipping point might be.

Okay. Suzy.

Just to develop that point further, because the question is what should be taken into consideration, it's at what point the provision of services becomes unviable, I would say, and that's going to change from ward to ward, certainly within any local authority area. So, it is not dissimilar to what Sam was saying, but that tipping point then prompts the question, 'Okay, well, do we want to roll back from that and increase or improve the viability of a particular community, or do we want to look at that particular community and turn it into a tourism cash cow?' That is obviously not what I'm suggesting here, but that's why I referred to the necessity to have guidance when any proposals are put forward to make sure that any local authorities are making decisions for the right reasons.

Okay, Suzy. Sam.

Thanks, Chair. Really helpful responses. I was trying to provoke a little bit, and that's great, because, actually, I think what you responded with is where we're becoming, or I'm becoming clearer, in terms of data and definition being two absolutely key factors to thinking around this and, for me, at the moment, where the biggest gaps are. So, I don't think there's anything else, Chair, I want to pick up, actually, on that lot. That was really helpful.

Okay, thank you very much, Sam. We'll move on then to Joel James. Joel.

Thanks, Chair, and hi, everyone. It's nice to see you again, Suzy. As just a quick thing, I wanted to touch upon taxation, really. I know it's been brought up previously, especially by Sam in terms of getting rid of the consultation on short-term holiday accommodation and that, but I just wanted to pick your brains about what you see as the point of taxation in this. When we talk about increasing the second home level of council tax, is that to disincentivise, is that to punish, is that to raise additional money, really? Because I know when we've spoken with other council leaders, they say, 'Well, to be fair, the amount of money it raises doesn't actually help in terms of improving local infrastructure or building affordable homes,' and I just wanted to see what everyone's views on that were, if that was possible.

Sam Rees.

Thank you, Chair. I think the Member has echoed exactly what RICS's thoughts are here: what exactly is the purpose of taxation? We're looking at this in a number of ways. Importantly, as the Member mentioned, is this to disincentive second home owners, is this to disincentive holiday let managers? Is it an extra income generator for local authorities to invest back into the communities, and if so, where is that money going?

I think what's important to recognise when we're talking about second home owners, when we're talking about holiday let home owners and the demographics of these people, these are people with above average levels of disposable income. So, paying 100 per cent more council tax or higher rates of transaction tax or removing business rates relief—business rates relief, admittedly, is a separate argument to have here—you've got to think what is the actual impact of it. Being honest, I don't think this is going to disincentivise many second home owners or put off people wanting to purchase a second home. What it might do is shut out a few, but those homes will go to second home owners with an even higher level of disposable income. So, I don't think it's going to disincentive people from purchasing their second home; I think you just get a different demographic of individuals moving into those properties.

Okay, Sam. Suzy.

Taxation has two purposes, mainly, doesn't it, which are either to raise money or to change behaviour, and where I agree with Sam is that, certainly, for second home owners, if we look at those, just the fact that there are already parts of Wales where there's a council tax premium and all the rest of it, we don't know yet what the effect of that is on people's decision on whether to buy a second home or not. I suppose there's a question on whether they might decide to sell their second home or not, as we're now heading into a period nationally of cost-of-living rises and so forth and people might be thinking, 'Well, having a second home is a bit of a luxury I can no longer afford.'

Where I think taxation could be a disincentive and would be a disincentive in the wrong place is for businesses—those bona fide commercial let businesses, who already are paying different levels of tax, which presumably we haven't got time necessarily to go into at the moment, and who already have a proven contribution to local economies, not least in employing people who themselves pay tax. So, it's a complicated picture, but it just reinforces that point of why we need a distinction between businesses and domestic properties, whether they're homes just for personal use or even if they're used for casual letting. Thanks.

Okay, Suzy, thank you. Anyone else on this? Daryl.

It was more on the land transaction tax rates and the higher residential tax rates that have been mentioned already and whether they're just a revenue stream for the authorities. It doesn't seem to be putting many purchasers off. Just having a quick look at the last figures, from October to December 2021, £28.3 million was brought in just from the higher residential tax rates, so that's people buying additional properties—I won't call them homes—additional properties, which is a 52 per cent increase on 2019. They didn't compare 2020 figures for the obvious reason. That's just the additional. I think, in total, I want to say £151 million for that October to December period was brought in from tax. And should some of this be allocated directly to housing? My understanding is it just goes into the budget and is allocated accordingly, so should perhaps the higher rates that have been brought in just be allocated to specific resources and building houses? I appreciate that would have to come from other parts of the budget, but that's maybe a suggestion.

Okay, Daryl. Thank you very much. Okay. I don't see any other hands—. Sorry, David.

I was quite late there, Chair, sorry. I just wanted to make the point about the significance of the industry's contribution to the economy and to the job numbers. We employ 140,000 people directly in Wales and another 40,000 through suppliers who provide food and drink and other services to the industry. The figure I've got is something like £3.6 billion a year to the economy in gross value added, and from visitors around the world in the UK we attract huge amounts of money. That money not only goes directly into the Exchequer in terms of business taxation, but, as Suzy said, it goes in on the back of personal pay-as-you-earn for all the employees that we have. And I'd like to make the point that there's a real need to separate some of the businesses from this in the context of what we're talking about today in terms of their contributions. Hotels—let's look at, say, a Cardiff city-centre hotel: 150 people employed; £0.25 million a month on payroll. We're looking at very substantial economic contributors that are generational, they're buildings that are there that will be used for those purposes, in the main, year on year, and how integral that is to the communities across Wales. So, when we're looking at taxation, there should always be an evaluation of the contribution that it makes to society—that businesses make to society—when that is taken into account, and I think that's what I'd like to flag up.

Thanks, David. Thank you very much. Joel.

Yes, perfect. Thanks ever so much for that. I just wanted really to ask another question, then—I know Sam mentioned it—in terms of if you increase the cost, really, that's not necessarily going to put people off buying; it's just going to encourage people who earn more to buy and everything. I just wanted to have an idea about what you felt that impact would have on the housing market. Could you see property prices further increasing, then? So, even though, for argument's sake, say, councils are trying to disincentivise second home owners and so they put 100 per cent or maybe even look to put more, a higher council tax, on that, could you see that having a reverse effect, so where that doesn't actually put people off buying these second homes and, as a result, house prices continue to rise then?

And another thing I wanted just to touch upon was something that came up in an anther evidence session, where they said that if you disincentivise second home owners, these properties are still being taken up by people moving into the community, sort of like a retirement community, and that's also adding to pressures on anglicisation of Welsh-speaking communities. I just wanted to know what your thoughts were there on that. Obviously, it's a different thing, but do you have any views then on the role the retirement community plays within this?

Okay. Sam Rees.

Thank you. Being honest, [Inaudible.] the kind of community element of those sort of gated-community type [Inaudible.] is not something we at RICS have looked into. It's certainly something we could look into in the future and report back to committee, but it's not something I think I would be qualified to answer at this stage.

Going back to your first point of whether we think higher taxation would have an impact on property values, it's difficult to answer at this stage. Ultimately, from my argument, higher council tax rates or higher land transaction tax would, of course, deter some buyers, and, yes, it might shift so it's people with an even higher level of disposable income purchasing second homes. At the end of the day, the housing stock will still be what it is—there will still be that very limited gap between the stock and demand. What you could argue—and I don't really have evidence that would show that at this stage—is that it would be people with even higher levels of disposable income or affluent people bidding against each other for house prices, so will that see the driver being the sale price? Yes, there's evidence elsewhere in the country of that happening, but that's not necessarily for second homes but for first homes. So, you are seeing that in other parts of the housing market. How prevalent that is within the second home market in Wales, I don't know. But it is certainly something that should be taken into consideration.

Okay, thank you, Sam. David.

It was just to say that, in terms of taxation, we'd obviously like to see lower taxation to enable the businesses that we represent to be able to upgrade to meet the Welsh Government's aspirations for the premium industry that we have and also to employ more local people, to be able to grow those businesses and to put further services into those communities. So, there is a very different area, isn't there, between the businesses that I'm talking about and the taxation policy that would possibly going into second homes there, and that is probably the nub of the difficulty that we're all trying to come to terms with.

Okay, thank you very much. Okay, Joel. We'll move on to Carolyn Thomas. Carolyn.

Okay, thanks. I'm going to ask you some questions regarding planning and regulation. I think we've touched on them already a little. So, the first question is about the benefits of having a registration or licensing scheme for short-term lets and holiday accommodation. I know we've discussed this already but if there's anything else you'd like to add, and also—[Interruption.] Sorry, that's my dog. Also, do you think the registration should be held at local level with each individual planning authority—we've got 22 of those—and should be regional? We're looking at, possibly, corporate joint committees going forward in the future and regional planning strategies. Or should there be a national framework as well? I know most of you have talked about the benefits of having them, really, for gathering data as well. Just any further thoughts on that. Thank you.

I think Suzy's indicated. Suzy.

Yes, just to reinforce the point that a national registration scheme for bona fide businesses is something that the WTA would support. The only thing I wanted to add to the question, and I think Daryl mentioned it before, was enforcement. So, whatever data is gathered is helpful, but whatever moneys are raised on the back of that, then we need to be sure they are put towards the improvement of quality or ensuring quality, and enforcement, which means that any moneys gathered are targeted against the bad guys, not the good guys, and one of the concerns, of course, of any registration scheme is that it will raise money and just be targeted at low-hanging fruit—you know, good guys making small mistakes and so forth. Absolutely not a local licensing scheme—it would just be a mess. So, yes to registration, no to local licensing.

Okay, Suzy, that's very clear. Thank you very much. Okay, Carolyn—oh, Daryl.

Sorry. I think there just has to be a purpose to a licensing scheme. Is it just a data gathering exercise? What's the point in that? That's just big brother watching. There has to be a purpose in it. I've mentioned already there should be standards, proper standards, introduced. I presume any licensing scheme would have fit-and-proper-person test, but what is that, and what will that relate to? So, I think, yes, any licensing scheme has to have a purpose rather than just admin for a local authority or a national scheme as well. Local authorities—if it was a local authority scheme—they would have to talk to each other. We've already seen other schemes operated by local authorities, and they don't talk to each other. The owners could be based in different local authorities, and one scheme not knowing the other has been thrown off one register, for example. So, a national register would probably be the best way forward, I would say.

I think there were discussions earlier as well, and previously when we've heard evidence, about short-term lets such as Airbnb being registered as well, to make a fairer playing field for forms of accommodation. Is that Shomik's hand up there? Did you want to come in?

I think so, yes. It may have been on the previous point, but Shomik, yes.

Hi, sorry—I think at my end the camera has died. I apologise. Thank you for bringing me back in.

Just on the registration scheme, I think we'd be very much in favour of this being a national registration scheme, because that would capture absolutely everything, and it's also much cheaper to have one system than lots of different local ones. It's quite important here to keep the costs down for those, to encourage compliance, to encourage everybody to get on there. So, we think it should be an online system. It should be easy to use, it should be cheap—a small sort of fee. And that will allow the Welsh Government to collect as much data as possible.

In terms of who should be on the registration scheme, I think our idea would be that it should be every property and they should be given a simple registration number so that it can be identified. But it should be done at the property level rather than at a firm level, for instance.

The only thing I think—just your views—on having a national scheme is, again, enforcement. So, if it's registered with a local authority, again, enforcement can be difficult with a local authority because of all the cuts and stretched services as well. But knowing where those properties are at a local level might be helpful. So, that's just my view. What would your view be on that, really, that enforcement, if it's a national registration scheme?

I think as long as the right data is given, it could be administered at a national level, and the local authorities would have access to that, and they would have the information that they need to enforce. So, I think it's probably more a question of just making sure that the authorities get the right data on that registration scheme.

Okay, thank you. And just moving on—. Is there anybody else who would like to contribute to that question?

Suzy, I think.

Just very briefly, when we were talking about an Airbnb property—because Airbnb and Vrbo are so dominant in the online market now—that covers a range of different types of property, and you find even things like well-established cottage agencies use Airbnb as well as the individual, possibly casual, property owner. So, it's quite helpful if we just don't talk about Airbnb properties now, because it's such a complicated field. But I get the point you were trying to make, so thank you.

Yes, I was just trying to bring it in for that conversation, and to get a response, really, I suppose. Thank you, yes. Right. And just regarding planning use as well, it's not possible to just build more houses is it, in certain areas, because of planning restrictions, and a lack of land, really, in certain areas that are highly desirable as well? So, what do you think are the benefits of having new planning-use classes for short-term holiday lets and for second homes, and any challenges that would bring? So, for example, at the moment, you don't need to have planning permission, do you, to just let a house out or for a short-term let? So, change of use so that it's no longer residential, so that it's a permanent holiday let, yes, but not for short-term letting. So, just really your views on that. We can't just build more houses, so it's really what stock we have and really to regulate how that's used and your views on that.

Okay, who would like to offer us some thoughts? Did I—? Suzy. Sorry. Suzy, yes.

Yes, sorry, Chair, it's just that I don't want to hog this thing. The Wales Tourism Alliance isn't against this as a way forward, actually, but it just wants to put a bit of a warning out there about unintended consequences. There is a whole range of them. Actually, a registration system would probably serve the needs of the tourism industry better and give local authorities the data they need for things like destination management and even fair taxation. The principle is okay, I suppose what I would ask is what the current position is for the classification of self-catering businesses. Do they come under the sui generis class for permitted development, or what? The position is currently unclear. So, one of the advantages, I suppose, would be introducing clarity into the situation.

Having said that, there shouldn't be any retrospective application of any new rules, which again then creates a divided market, and to avoid things like, if you actually have a second home or even a business that you want to sell to somebody who wants to use it as a private home, does the person who buys it as a private home then have to make a planning application to turn it back into a private home? So, that's a disincentive—or an additional burden, I should say—for local residents buying a property that was previously classed differently. So, that's just one example of an unintended consequence, but, as a principle, it's okay, just that we'd prefer a registration scheme, which would achieve the same aims.

I think it's been raised before that, in really popular holiday destinations, you've had a street, a community, and then recently we've had more people wanting to holiday here, people from— . They've had notes through the door from people who are being speculative, saying, 'We're based in Manchester', or wherever, 'and we're very interested in buying homes in this area for rent.' And there are real concerns about the loss of community when lots of homes are going to be changed to holiday lets and holiday accommodation.

Can I come in there? No, I agree. Can I just add there—? You mentioned somebody from Manchester doing a speculative search, and that does happen, but also people in Wales own second homes and own businesses. So, this isn't just a case of people from other parts of the UK on a raid.

No, I'm just quoting what has been said to me from people. So, I'm just quoting it as they've told me. So, I'm passing it on, really. Thank you.

I think Shomik wanted to come in and then Sam Rees as well. Shomik.

Yes, thanks. It's almost to reiterate a point I made a bit earlier, that we would be in favour of two classes here: essentially a mixed-use residential class for those who are resident in a property for some portion of the year, because they would then be able to let that out freely when they're not there, or at least for a good portion of the year when they're not there—better use of the home; and then, if you're doing it as a business or commercially, then having a separate use class there for that to also be allowed, because there are very good reasons for it, but if there are any particular controls or pressures that need to be addressed at a local level, then they could be addressed through that.

Thank you very much, Shomik. And Sam Rees.

Yes, thank you. Echoing Suzy's point as well, where does the distinction between—? What's the point of a class use between that other licensing system as well? Could they play the same role? But on the other point as well about could it help to support local communities, you could argue that, if a second home class use gets put onto the market, you can argue that that class use should then automatically change for a local resident owner-occupier home, and any second homeowner would have to apply for change of use for that property there. You could argue whether or not that's a possibility.

Okay. Carolyn, any other—? Oh, sorry, Daryl as well. Daryl.

I think I was just going to go along the same lines that Sam has just mentioned, and the unintended consequences that you could have if you've got a property with a class use in it and it's for that class use only, if somebody is trying to market the property, can it then only be marketed for somebody else who's looking for it for that use? It may be five, 10 years down the line when it's not so popular. The property may be just sitting there for some time, or it may be turned around quite quickly. Maybe somebody's paid a premium for it and wants to keep it at those levels. And then, I suppose you would have to consider any mortgages on the property as well—are you restricting mortgageability on a property with a specific class use as well?

And I'll go back to enforcement, where somebody has purchased a property where the property has less of a valuation than it would be for home ownership because of the class use—who's going to monitor that? Who's going to know the title condition of that property if we've not joined all the dots, and there's no register there as well? So, I think it has, again, more questions with no answers.

Yes. Okay, Daryl. Carolyn.

Okay, the third one was just really about evidence of properties moving from the private rented sector to the short-term lettings market, and the impact that movement is having on housing supply locally and what the Welsh Government can do to address this. That has been discussed, really, and touched on already a little bit, but just if there's anything else to add regarding that, please.

Sam Rees.

Thank you. Just to clarify straight away, RICS doesn't have any anecdotal data that shows landlords specifically moving from the PRS sector into the holiday let market. I'm sure other colleagues on the call might have that, or and organisation like the National Residential Landlords Association might hold some data. What RICS have seen—we've got support from Rent Smart Wales, for example, which will back this up—is a shift in the marketplace where landlords are leaving the market as a whole, whether or not that's in Cardiff city centre, in the Welsh Valleys or within areas with a high percentage of second homes, mostly because the last few years have seen a significant amount of pressure put on landlords—COVID-19 restrictions, minimum energy standards as well. There's a whole variety of reasons why landlords are leaving the marketplace. So, I couldn't specifically say they're going for holiday lets. I'm sure there are some, but it's important to take that into wider consideration about what the wider changes have been on the private rented sector recently.

Okay, Sam. Daryl.

Yes, I think we may see a little bit more as well. The new tenancy regime will kick in on 15 July, introducing—and, again, I've already mentioned it—fitness standards that landlords have to meet, and the registration qualification. There are enforcement elements there as well. None of that is really prominent in the short-term lettings market, and if there's a cheap crossover and it's a buoyant market, I think we'll see a little bit more of that as well. Again, it's a UK problem, currently, a lack of stock for any letting agents just now trying to get properties. That's throughout the UK, so, yes, landlords are selling up, again, because you've got a buoyant sales market at the moment, and investors aren't really here to purchase at the moment.

Thank you.

Okay, thank you all very much. This is a final question in terms of gaps in data and knowledge around these issues, and a number of you have made points already on that and, of course, you've submitted, many of you, your written evidence. Is there anything else you'd like to highlight on that subject of gaps in data and knowledge, anything you'd particularly like to direct the committee's attention to? Sam. Sam Rees.

Thank you. It was just to highlight that RICS do collate a monthly market survey across the United Kingdom for a variety of different housing market factors, one of which is the level of stock per estate agent, or estate agent branch as it were, and the sales demand, how many enquiries they’re getting from people looking to move home. The data we've got precedes Brexit, it precedes COVID-19, and it just shows there’s been a narrowing of the market for the last 10-plus years all across the UK. What we have been able to pull out, however, is that the average level of stock versus the demand is narrower in Wales than other parts of the UK—that we have got. On average, year on year for the last quarter, estate agents in Wales typically had seven homes fewer on the marketplace than estate agents in England. What we can’t do is break down that data into specific regions in Wales. That is something, however, we are willing to invest in. We do get dozens of estate agents every month feeding insight into our marketplace, so we can certainly look to expand and report back to the committee, which will give a very localised data set.

That would be great, Sam. Obviously, evidence is absolutely crucial to this inquiry, as with any other, so we’d very much welcome that. Shomik and then Suzy.

Thank you. Just to make the committee aware that there’s a difficulty with collecting data on short lets, in particular via looking at platforms' listings, because people list on multiple platforms, so there are all sorts of issues with double counting and that sort of thing. Ultimately, again, it's a really good reason for having a registration system with a registration number per property, because that will be the time we'll be able to collect the right data and be able to analyse it appropriately.

Yes, thank you very much, Shomik. And Suzy.

Thank you, Chair. There are three things for me. One is the data that's available on the different types of properties that are currently being used either as holiday lets or second homes. There are some properties that, either through the current planning regime or through the type of property they are, wouldn't be suitable as family homes anyway and then shouldn't be counted into stock that could be available for improving the availability to the local community. I'll leave it at two. The second one is whether there's any data collected on the scheme that ran certainly in Powys, and a similar scheme is referred to in the Simon Brooks report, about local occupancy restrictions, which is different from local ownership restrictions. Certainly, in mid Powys, when Newtown was designated a new town and there was an explosion of building there, a certain percentage of that property had local occupancy restrictions imposed on it to prevent just people pouring in from the midlands to cheaper properties. So, if there's any examination or data going back to those days, I think they'd be quite useful in examining whether the proposals in the Brooks report actually would work.

Suzy, thank you very much, and I thank all our witnesses very much for coming in virtually to give evidence to the committee this morning. So, thank you, Suzy, thank you, Shomik, thank you, David, Daryl and Sam. You will be sent a transcript of the evidence to check for factual accuracy in due course. Thank you very much. Diolch yn fawr.