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Welsh Government announce new tax rules for second homes

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The Welsh Government has announced an increase to the maximum level of council tax premiums for second homes, as well as new local tax rules for holiday lets.

The changes represent more steps taken to ensure people can find an affordable home in the place they have grown up.

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The measures are part of a wider commitment to address the issue of second homes and unaffordable housing, as set out in the Co-operation Agreement between the Welsh Government and Plaid Cymru.

The commitment is to take immediate and radical action using the planning, property and taxation systems.

The maximum level at which local authorities can set council tax premiums on second homes and long-term empty properties will be increased to 300%, which will be effective from April 2023.

This will enable councils to decide the level which is appropriate for their individual local circumstances. Councils will be able to set the premium at any level up to the maximum, and they will be able to apply different premiums to second homes and long-term empty dwellings.

Premiums are currently set at a maximum level of 100% and were paid on more than 23,000 properties in Wales this year. Local authorities opting to apply premiums have access to additional funding, and the Welsh Government has encouraged councils to use these resources to improve the supply of affordable housing.

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The criteria for self-catering accommodation being liable for business rates instead of council tax will also change from next April.

Currently, properties that are available to let for at least 140 days, and that are actually let for at least 70 days, will pay rates rather than council tax. The change will increase these thresholds to being available to let for at least 252 days and actually let for at least 182 days in any 12-month period.

The change is intended to provide a clearer demonstration that the properties concerned are being let regularly as part of genuine holiday accommodation businesses making a substantial contribution to the local economy.

Both changes follow a consultation processes including businesses, the tourism industry and local communities.

Rebecca Evans, Minister for Finance and Local Government, said: “These changes will give more flexibility to local authorities and provide more support to local communities in addressing the negative impacts that second homes and long-term empty properties can have. They are some of the levers we have available to us as we seek to create a fairer system.

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“We will continue to make every effort to increase the supply and availability of houses, as shown by the £1bn of funding to build 20,000 low carbon social homes, contained in the budget I published at the end of last year.”

Designated Member Sian Gwenllian MS said: “It is clear that we as a country are facing a housing crisis. So many people cannot afford to live in their local areas, and the situation has worsened during the pandemic. These changes will make a difference, enabling councils to respond to their local circumstances, and start to close the loophole in the current law. It’s a first, but important, step on a journey towards a new housing system that ensures that people have the right to live in their community.

“Through the Co-operation Agreement, we are committed to introducing a package of measures to tackle the injustices in the housing market. Today’s announcement is just one part of that wider package. Second homes are a symptom of a wider problem – a market that treats property, not as a home, but as a way of making a profit. By working across the parties in the Senedd, we will introduce more measures, as soon as we can, to make house prices and rents genuinely affordable for people.”

Last summer the Welsh Government outlined a three-pronged approach to address the impact of second home ownership faced by Welsh communities. This seeks to address the affordability and availability of housing, amend the regulatory framework and system, and ensure second home-owners make a fair and effective contribution to the communities in which they buy.

Julie James, Minister for Climate Change, added: “We want people to be able to live and work in their local communities. But we know rising house prices are putting them out of reach of many people, exacerbated by the cost-of-living crisis we are facing.

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“There is no easy answer or quick fix solution. This is a complex problem that requires a wide range of actions. We continue to carefully consider further measures that could be introduced, and these changes are the latest steps we are taking to increase the availability of homes and ensure a fair contribution is made.”

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Construction

Construction work soon to start on Swansea’s ‘living building’ at former Oxford Street Woolworths site

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With main construction work due to start in the coming weeks, city leaders have visited the Swansea site where a major new ‘living building’ project will soon be taking shape.

Cllr Rob Stewart, Swansea Council Leader, and Julie James, the Welsh Government’s Minister for Climate Change, were talked through details and timescales for the development, which will be located at the former Woolworths unit on Oxford Street.

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Earmarked for completion by the end of 2023, Swansea-based Hacer Developments is behind the scheme, which is one of the first of its kind in the UK.

Made up of the former Woolworths unit and a new adjoining 13-storey structure, the ‘living building’ will include green walls and green roofs, an educational facility, retail, offices, a landscaped courtyard, rooftop solar panels, battery storage and gardens. Pobl Group will manage 50 affordable apartments forming part of the scheme.

Other scheme features include an urban farm-style greenhouse set over four floors. Plants and vegetables will be grown in water and fed by waste pumped from fish tanks at the bottom of the building.

A green walkway including seating through the building will link Oxford Street to a new public space leading to the 71/72 Kingsway scheme being developed by Swansea Council.

Cllr Rob Stewart, Swansea Council Leader, and Julie James, the Welsh Government’s Minister for Climate Change, were talked through details and timescales for the development, which will be located at the former Woolworths unit on Oxford Street. (Image: Swansea Council)

Stripping-out and demolition works have now been completed at the ‘living building’ site, paving the way for main construction to begin.

The visit also included a tour of the new 33-apartment building at the city’s Copr Bay district developed by Swansea Council, which is set for completion this summer.

To be run by Pobl Group and located close to the new bridge over Oystermouth Road, the affordable apartments will cater for local people working in the city centre, with a particular focus on key workers. 

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Climate Change Minister Julie James said: “What we have seen through this work is an excellent example of the affordable homes we need to build in Wales.

“These new homes in the heart of Swansea city centre will make a huge difference to the quality of living for so many people.

“We need to see more projects like this delivered across the country as we strive to become a stronger, greener, fairer Wales.”

Cllr Stewart said: “Led by Hacer Developments, the exciting ‘living building’ scheme follows on from our work to transform the look and feel of The Kingsway.

“It will create jobs for local people while helping Swansea in its drive to become a net zero city, complementing the nearby office development at the former Oceana nightclub site that will be carbon zero in operation.

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“The residential element of the scheme will also meet the city’s accommodation needs by creating more affordable living opportunities in the city centre. This is also the case for the apartment building at the Copr Bay district developed by the council, which will benefit from excellent links with the new coastal park adjacent to Swansea Arena.”

Carwyn Davies, Managing Director of Hacer Developments, said: “We’re delighted that main construction work will soon start on the highly innovative ‘living building’ project, but it wouldn’t be possible without the support of the many partners involved, including Swansea Council, the Welsh Government, Pobl, the Development Bank of Wales, Swansea University and Cardiff University  – as well as our fantastic design and site team.”

The visit also included a tour of the new 33-apartment building at the city’s Copr Bay district developed by Swansea Council, which is set for completion this summer. (Image: Swansea Council)

Claire Tristham, Director of Developments at Pobl Group, said: “Pobl has a growing reputation for delivering forward-thinking housing solutions that push the boundaries.

“We are excited to be working with Hacer on this innovative project that will deliver much-needed, high-quality, affordable homes for Swansea and support the council’s wider regeneration plans for the city centre.

“Support from the council and Welsh Government has been critically important to this development, so we were delighted to able to welcome the Minister on site to officially launch the start of work on this truly unique project.”

The ‘living building’ is being funded by a mixture of private sector funding and funding from the Welsh Government’s Innovative Housing Programme, Pobl and the Development Bank of Wales.

Set to accommodate 600 workers, the nearby office development at the former Oceana nightclub site – due for completion in the summer of 2023 – is being funded by Swansea Council and the Swansea Bay City Deal. It is also being supported by the European Regional Development Site through the Welsh Government.

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The Copr Bay phase one district has been developed by Swansea Council, supported by development managers RivingtonHark. Buckingham Group Contracting Ltd is leading on its construction.

(Lead image: Swansea Council)

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Construction

Housebuilder reports “exceptional demand” as Aberavon development launched

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“Exceptional demand” has been reported as the first homes at a new development on Aberavon seafront were released for sale.

All appointments were fully booked on Saturday as Persimmon Homes West Wales opened the doors to the sales office.

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Two homes were purchased at the Awel Afan development and a further 10 reserved on the Early Bird scheme over a busy weekend.

A total of 137 homes are being built on the former Afan Lido Leisure Centre site on Princess Margaret Way.

Sharon Bouhali, Sales Director at Persimmon Homes West Wales, said: “We’re pleased to have launched our Awel Afan site.

“The demand has been exceptional. Right from the moment we acquired the site and announced the plans, we have seen a phenomenal amount of interest from a wide range of people wanting to live in his amazing location.

“The housing market remains buoyant in West Wales but, even so, the buzz around Awel Afan is almost unprecedented.”

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Opened by the Queen in the 1970s, the Afan Lido was destroyed in a fire in 2009 and the site has been unused since.

Persimmon say the development will bring a massive boost to the local economy through the construction industry and its multiplier effect. According to figures from the House Builders Federation, for every £1 spent on housing, £3 goes back into the economy.

The national house builder says that each home built also creates 1.5 full-time direct jobs – and at least twice that number in the supply chain.

The development will be made up of two, three and four-bedroom houses, as well as a range of two-bedroom flats.

Homes currently on sale include the popular two-bedroom terraced Alnwick with its modern open plan kitchen/diner and the four-bedroom detached Hornsea with ensuite and integral garage.

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Persimmon Homes recently supported Afan Lido Girls FC with a game-changing grant of £20,000 through its Building Futures campaign.

(Lead image: Persimmon Homes)

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Construction

Time to raise the bar on Wales’ housing standards says Minister

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Welsh Government Minister Julie James has announced the upcoming launch of a consultation on proposed new social housing quality standard for Wales.

The Minister said the Welsh Housing Quality Standard 2023 (WHQS 2023) would ‘build on the excellent achievements of its predecessor’ – the standard introduced in 2002.

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Since then, the Welsh Government has worked with social landlord delivery partners to invest billions of pounds to significantly improve and maintain the quality of social homes across Wales.

As a result, by the end of 2020, 99 per cent of social housing in Wales met the original WHQS – a standard which is more demanding than in the other home nations.

Speaking in the Senedd, the Minister said: “Reflecting on the levels of achievement of the current standard, I am sure members will agree that, after 20 years, the standard is due to be reviewed, especially to acknowledge the considerable changes to how people live, work and feel about their homes.

“The world has moved on apace in the last 20 years and our expectation of our homes has moved on too.

“The proposed standard aims to be bold but ultimately achievable. We aim with our consultation to ensure that the voice of the sector is taken into account in finalising these standards and getting them right.

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“Setting standards is not an easy business at the best of times. It is even more challenging setting standards relating to the decarbonisation of homes – which is a developing area where we are learning what works best on an ongoing basis.

“The £220m committed over this term of government to the Optimised Retrofit Programme, our whole house, pragmatic, approach to decarbonising existing homes will help.

“It will provide some of the answers to how we effectively and efficiently reduce carbon emissions from homes in line with our Net Zero Wales plan.

“However, in the face of the climate change emergency we cannot stand still, and we must continue to push progress and set standards to address decarbonisation through a variety of measures in existing social housing.”

More than 900 tenants have been involved in the development of the new standard and technical elements have been supported by experts who have looked at what else is happening across the UK and the rest of the world.

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The Minister added: “I make no apology for proposing what some will see as a bold approach, I am determined the standards bar should be raised again.

“Meeting our Net Zero Wales targets requires us to make determined progress and I believe these standards are fit to take us forward in that regard.

“Our social housing tenants deserve these standards to be the best we can make them.

“My firm hope is that these standards will not only be brought to bear for social housing, but that in the future other tenures may consider how they too might meet and exceed these expectations.”

The proposed WHQS 2023 standards will be published for consultation from Wednesday May 11 and will be open for stakeholders to respond to for 12 weeks.

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