Generation Rent calls for stronger council powers as holiday lets surge

A dramatic rise in second homes and Airbnb-style holiday lets has driven families out of their communities as landlords prioritise profitability, according to a new report.

Research by Generation Rent found that by 2022, there were more than 330,000 holiday homes in England, accounting for around 7% of the private rented sector.

The tenant group is now calling on the government to give local councils the power to license holiday lets and restrict their numbers.

Number of holiday lets has reduced due to tax changes

According to the report, many second homes are let out as holiday lets, with 130,000 taxpayers declaring holiday let income in their tax returns.

Generation Rent claim in their report: “Expansion in the holiday home sector has been accelerated by a lack of effective regulation of short-term commercial holiday lets, alongside tax advantages that make holiday lets more profitable for landlords than residential tenancies.”

However, the number of holiday lets has reduced in recent years due to tax changes. In 2025, there were 268,152 second homes and 67,858 holiday lets, a total of 336,011. This is up from 2022 but down on 2024’s peak of 346,956.

The Conservatives ended the Furnished Holiday Letting (FHL) tax benefits. The scheme allowed holiday let landlords to claim tax relief on their properties if they let them out to holidaymakers for at least 105 days a year.

Other measures gave local authorities discretionary powers to charge up to 200% of the standard council tax rate on second homes. More than 70% of local authorities in England have chosen to exercise this new power.

Drop in holiday lets due to council enforcement

Generation Rent’s findings also reveal that the Isles of Scilly comes out on top of the top 10 local authority holiday home hotspots, based on holiday homes as a proportion of total housing stock at 31%.

Westminster (5%), Wandsworth (1%), and Oxford (1%) have seen holiday homes increase as a share of the local housing stock.

However, the report also finds a drop in holiday lets due to council enforcement, particularly in Camden, which saw the largest decrease in the proportion of holiday homes between 2021 and 2025, falling by three percentage points.

Over the same period, the council recorded a 61% rise in Empty Homes Premium charges, which are applied to properties left empty for at least a year to encourage owners to bring them back into use.

Generation Rent data shows holiday homes in Manchester have fluctuated over the past 18 months.

The tenant group reports many flats start as ‘second homes’ because they are furnished with unknown occupancies, while empty homes are usually unfurnished. Over time, they may be reclassified as student or occupied dwellings. Generation Rent found that 73% of second homes in Manchester still aren’t paying the relevant premium, likely due to this delay.

Give councils more powers to crack down on holiday lets

The tenant group is calling on the government to crack down on holiday lets and give councils stronger enforcement powers.

Generation Rent posted on X, formerly Twitter: “Holiday lets are pricing locals out of their own communities.

“The government must give councils the powers they need to license and limit them, now. Without action, tourism will keep taking homes.”

The news comes as the government announced last year a consultation on new powers for regional Mayors to impose an overnight levy on holiday lets.

The Ministry of Housing, Communities and Local Government have confirmed any new levy would apply to visitors at accommodation providers, including hotels, holiday lets, bed and breakfasts, and guesthouses.