Landlords are choosing to let homes to tourists on a short-term basis rather than to long-term tenants, according to a tenants campaign group.

Generation Rent says rents in Wales, Scotland and south west England have soared since the pandemic as landlords have switched properties to the holiday lets market.

Research by the group found it costs about one quarter more to rent a home in regions popular with holidaymakers than it did two years ago. It also found that the number of properties available to let has fallen sharply – especially in Wales where there are 53% fewer homes available to long-term tenants.

In contrast, rents in London are down by 17% compared with July 2019, with the number of listings up by 10% in the same period.

The findings are further evidence that the popularity of rural and coastal Britain since the pandemic is putting pressure on renters. Generation Rent says tenants are being ‘priced out of their communities’.

The group says the issue is exacerbated by an incentive for landlords to switch properties from the rental market to the tourist market. By letting out properties on a daily or weekly basis, instead of on tenancies, they can avoid paying tax on their mortgage interest payments.

Generation Rent looked at data published by Zoopla on the number of listings and the average rents in each region, on 15 July 2019 and 16 July 2021.

In Wales, listings have fallen by 53% over that period and rents have increased by 26%. In south west England, listings have fallen by 49% and rents are up 23%. In Scotland listings are down by 28% and rents up by 24%.

Using government figures, Generation Rent also looked at what proportion of landlords in each local authority had holiday lets and compared how many holiday lets were being advertised online with the number of homes being advertised to let for tenants.

While holidaymakers to a hotspot might have a choice of thousands of short-term lets, in many areas fewer than 100 homes are available for locals to live in.

In the Scottish Highlands, where 22% of landlords have holiday lets, 5,049 holiday lets are being advertised, but just 15 properties to let on Zoopla. In Pembrokeshire, 19% of landlords have holiday lets; the analytics website AirDNA counts 3,571 holiday lets, but there are just 24 homes to let on Zoopla.

Generation Rent is calling on the chancellor Rishi Sunak to withdraw mortgage interest relief from landlords of furnished holiday lets, as part of creating a level playing field with the wider private rented sector, and encourage more landlords to make homes available to people who need somewhere to live.

Alicia Kennedy, director of Generation Rent, said: “Self-catering accommodation plays an essential role for the tourist industry, but it is too easy for landlords to evict locals from their homes to make way for more lucrative holidaymakers. As a result, communities are being torn apart and businesses that serve tourists struggle to find staff. The situation is unsustainable. The government must give councils powers to tax and regulate their local holiday lets market appropriately, but should also act directly to take tax perks away from holiday lets so we keep homes available for people who need one.”

YourMoney.com