Local homeowners have become alarmed by rapid falls in the value of their homes as a result of Gwynedd Council’s aggressive taxation of second homes and holiday lets and the whole property sector should take note says Propertymark.

The housing situation in the area had been described as ‘critical’, with over 65% of the local population priced out of the market. It was even worse in highly desirable areas, such as the Llŷn Peninsula, where the median house price rose above £400,000, making it unaffordable for 96% of local people.

In response, the local authority used new powers to raise the premium tax rate for second homes and short-term lets (STLs) by 150% and implemented an Article 4 direction, removing permitted development rights to change a main home into a second home or short-term holiday accommodation.

Semi-detached homes 21% down

As a result, data from Principality Building Society shows there was a 12.4% fall in average house prices in Gwynedd in Quarter 4 of 2024. That is substantially more than the 0.4% average fall in the rest of Wales. And there was an even bigger 21% fall in the price of a typical semi-detached home in the county.

Propertymark says that, for existing homeowners, the falls are alarming, yet, with the average salary in Wales at £34,303 and an average house price of £221,330, it still leaves many people priced out.

The industry body says it recognises the problem and has frequently highlighted the huge growth in the short-term lets sector and has raised concerns about the impact on housing affordability and supply for private rent and owner-occupation.

Preventative measures better

However, it claims prevention would have been better than the ‘cure’ and is urging the Government and local authorities to carefully consider the impact of policies that may incentivise landlords to start using their properties for short-term lets and is calling for a level regulatory and tax playing field between short-term and long-term lets.