Hunt’s attack on holiday lets mean only the super rich will be able to have a second home

Listening to the Budget you’d be forgiven for thinking Jeremy Hunt was talking about a different country, but then this is the Chancellor who thinks abolishing the furnished holiday letting regime will make the taxation system work better for people locally.

He couldn’t be more wrong.

Offsetting mortgage interest relief and allowing profits to count as earnings for pension purposes is part of the trade of running tourist accommodation. Ask anybody who’s ever run a holiday let and they will tell you how much work is involved to keep holidaymakers happy.

At this stage it is unclear if the capital allowances will also be removed – but if they are, you can be sure the quality of any fixtures and fittings and furniture provided within a holiday let will suffer. The cost of equipping holiday accommodation has always been high, but following Brexit and Covid and the resultant supply issues the expenses of providing these items has soared.

What is most infuriating about Mr Hunt’s attack on the holiday accommodation sector is that one of the requirements for accommodation to qualify as a furnished holiday let: “The property must be commercially let (you must intend to make a profit).”

How then does Chancellor Hunt suppose owners can make a profit when they can no longer deduct the most basic of business expenses from their business?

It is utterly farcical and shows how far this Conservative government is willing to go to rip the entrepreneurial heart out of Britain. Britain is no longer a nation of shopkeepers; it is a nation of sheep where we are expected to graze on the scraps cast off by big business.

In his Budget speech, Mr Hunt proclaimed: “The furnished holiday letting tax regime is creating a distortion, meaning not enough properties are available for long-term rental by local people.”

What he really meant was: we will crucify anybody who owns a private property who intends to make any money from anything to do with it.

That is despite the fact a holiday let needs to make a profit and be available to rent for at least 210 days of the year. And, following last month’s announcement, also needs to have planning permission to be let for more than 90 days per year – and be registered on a mandatory national register.

Perhaps he thinks those holiday accommodation owners will now switch to the long-term residential rental sector. I don’t think he could be further from the truth. Faced with a punitive tax regime and an onslaught of ever more onerous regulations and tenant protections, including the abolition of Section 21, there is no reward left for anybody to remain in this sector. In short: the properties will be sold. And it’s doubtful they’ll be bought by local people.

What Mr Hunt has ensured with his wilful killing of the private holiday accommodation market is a local job shortage. Given tourism as a whole contributes over £250bn to the UK economy and AirBnb claims people using its platform have supported over 107,000 jobs across a variety of sectors in 2022, the assault doesn’t appear very business friendly.

In Britain, we have been so lucky to have a thriving rural local tourism economy. The tax reliefs on offer have encouraged property owners to build businesses to support and work with their local community. The removal of the holiday let allowances will now ensure only the rich can buy and only big businesses can operate. Local employees will suffer from the reduced job market and customers will be deprived of choice leading to more expensive options and less availability.

One can only hope these local areas don’t go the way of Italy’s abandoned villages, which have been decimated by chronic underinvestment and underpopulation.

Given house prices are so key to this country’s success, we won’t routinely see properties in the back-of-beyond flogged for £1 to try and stimulate investment. But you have to wonder what will replace such local investment when the holiday accommodation owners leave.

Email secretlandlord@telegraph.co.uk

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