Council tax premiums on second homes have failed to deliver stronger rental markets in key locations such as Devon and Cornwall.
LandSale analysed residential transaction volumes across England, the South West in general, and Devon and Cornwall in particular, to assess how housing market performance has evolved following changes to the rules surrounding second homes and holiday lets.
The research also examined the distribution of holiday let properties currently listed for sale across England.
Across England, there are an estimated 10,334 properties currently listed for sale that are suitable for use as holiday lets. More than half, 51.2%, are located in the South West, underlining the region’s importance as England’s largest holiday let market.
LandSale’s own data reinforces this picture, showing that 30.2% of all holiday let listings currently marketed through its platform are located in the South West.
The East of England and Yorkshire & the Humber rank joint second, each accounting for 14.3% of listings.
The South West’s dominance is largely driven by Cornwall and Devon, two of the UK’s most popular tourist destinations.
However, the rapid growth of holiday lets and second homes has become increasingly controversial, with many local communities arguing that they have reduced housing availability, inflated property prices and left towns and villages with large numbers of homes standing empty for significant parts of the year.
In response, the government gave local authorities greater powers to discourage second home ownership, including the ability from April 2025 to charge a council tax premium of up to 100% on second homes.
The policy was intended to reduce the financial appeal of holiday lets, encourage more homes back onto the residential market and improve housing availability for local buyers.
While higher running costs appear to have encouraged more holiday let owners to sell, the wider housing market has yet to see a corresponding uplift.
Between 2024 and 2025, residential transaction volumes across England increased by 4.4%.
Over the same period, transaction growth reached just 3.7% in Cornwall and 1.5% in Devon, suggesting both markets remain comparatively subdued despite an increase in properties coming to market.
A LandSale spokesperson says: “There’s evidence that higher council tax charges have encouraged more holiday let owners to bring properties to market, but increasing supply is only one part of the equation. A healthy housing market also relies on strong buyer demand and consistent transaction levels.
“More than a year on from the introduction of these changes, the data suggests the policy has yet to translate into stronger market performance. Instead, both Devon and Cornwall continue to trail the wider market when it comes to sales activity.”
This article is taken from Landlord Today