Second Homeowners in Wales Trapped in ‘Living Hell’ as House Prices Fall and Costs Soar
Second homeowners in parts of Wales say they are trapped in a “living hell” as house prices drop, costs skyrocket, and tourism regulations tighten—leaving many unable to sell or manage their properties.
Alan Harper-Smith’s property journey began modestly—saving for a deposit on a two-bedroom flat next to a railway in what he calls a “down-at-heel” neighbourhood. Now 67, he owns a former farm on the Llŷn Peninsula in Gwynedd, featuring five converted 16th-century cottages let as holiday homes and a farmhouse run as a B&B. For years, it was a dream come true.
But recent changes to legislation and tourism policy have created a climate of uncertainty and financial strain. “To be honest, we’re thinking of selling up,” Alan told North Wales Live. “All the new restrictions and the destruction of tourism in Wales… it’s driving me bonkers and my health is suffering. From a mental health perspective, it’s probably worth selling, even if I lose money.”
Alan’s experience reflects a growing sense of disillusionment among property owners in North Wales. The local housing market has cooled sharply, with homes stagnating on the market even after price reductions. One Gwynedd resident reported that a sea-view bungalow which previously attracted eager buyers had sat unsold for a month without a single viewing—despite being improved.
In Conwy, another couple, both pensioners, are struggling to sell their second home as they face a steep council tax increase—from £3,866 to £9,666 annually. After two years on the market without success, the husband confessed: “I’m sick with worry. My Welsh-born father and grandparents would be turning in their graves.”
In Pen Llŷn, a 76-year-old homeowner expressed deep regret over her 2017 purchase, unaware at the time of the impending complications. “Had I known what was ahead, I’d never have bought in Wales,” she said. “Now I can’t even sell to be closer to my family.”
Holiday Let Owners Hit Hard
Holiday let owners are among the most affected, facing a “hideous” dilemma. New regulations introduced in April 2023 require holiday properties to be let for at least 182 days per year to qualify for reduced business rates. Those who fall short are hit with significantly higher council tax bills—sometimes up to 300% of the standard rate.
Even property owners who met the new requirements have received surprise tax demands based on previous years when the rules didn’t yet apply. Nicky Williamson from PASC Cymru, an organisation supporting self-catering accommodation providers, warned: “People are getting huge bills for not meeting a threshold that wasn’t legally required at the time. A family recently got a £37,000 bill, despite meeting the 182-day target now.”
The root of the problem lies in how the Valuation Office Agency assesses holiday let eligibility over a rolling three-year period—penalising owners retrospectively for years before the rule change.
Although refunds are technically available for post-2023 compliance, the system is plagued by backlogs. “I know of claims submitted last July still waiting,” Nicky said. “Some owners are ignoring the issue, but the debt is only growing.”
The property glut caused by second homeowners trying to exit the market is further depressing prices. In Gwynedd, a key contributing factor is the implementation of Article 4—a planning restriction that requires change-of-use permission for converting properties into second homes or holiday lets. The Eryri National Park will enforce a similar measure from 1 June.
Balancing Tourism with Housing Needs
Supporters of the new policies argue they’re necessary to make housing more accessible to locals. According to Cyngor Gwynedd, 65% of local residents are priced out of the market. The council plans to build 700 new homes, including 361 affordable units, and is campaigning for greater control over Airbnb conversions.
Yet critics claim the government is overcorrecting. In Pembrokeshire, where second home council tax premiums reached 200%, house prices fell by 8.9% in 2024. The premium was recently lowered to 150% amid fears the local market was stalling entirely.
Even with reduced prices, selling remains difficult. “I’ve been trying to sell for a year,” one frustrated homeowner in Gwynedd wrote online. “Estate agents just want you to keep dropping the price. I’m in the red compared to what I paid.”
The broader Welsh housing market is showing signs of strain. In the last quarter of 2024, just 760 new homes were started—down 59% from the previous year, and the second lowest figure in a decade. Some critics now accuse the Welsh Government of creating a “self-inflicted” housing crisis.
Alan’s Dilemma
Back in Llanbedrog, Alan is exploring drastic options. He’s considering decommissioning his cottages by removing kitchens and bathrooms, converting them into office rentals to avoid the punitive council tax. “The business would be totally unviable if I had to pay full council tax on all five properties,” he said. “My costs would jump from £9,000 to £44,000 a year.”
He’s also frustrated by perceived inconsistencies in regulation. “Caravan parks and glamping sites don’t face the same rules,” he noted. “Why should we pay council tax and they don’t?”
Despite his frustrations, Alan remains reluctant to sell. “I’ve reinvested everything I’ve earned back into these cottages, using local tradespeople. We bring in visitors, charge fair prices, and support the community. Yet we’re being punished, and it feels like we’re no longer welcome.”
Like many, Alan is stuck between wanting to stay and being unable to continue. “We’re not big investors or speculators,” he said. “We’re just families trying to make a living in a place we love.”
