It is a beautiful evening in Morfa Nefyn. The sun is shining, the rays hitting the sea which in turn reflects an amazing spectrum of colours from vivid blue to aquamarine. The crippling heat of the recent heatwave is pushed away by a light breeze. The sky is almost entirely clear.
As you approach the village from the south, the number of cars with roof boxes increases, the laybys grow increasingly full with mobile homes. Driving past Sglods Gwen's chip shop, there's a queue outside. Further into the village, most of the shops have closed for the day but there's a steady stream of people making their way up from the beach past the golf club and back into their cars. Families with their bags of beachwear, people in wetsuits, dog walkers, all stroll past, many stopping at the top of the hill to take in the view. Those walking to the beach have those dropped shoulders that come with being on holiday. One woman is Facetiming someone to show just how beautiful it looks, others are discussing where to go fishing later in their holiday.
The view, particularly on an evening like this, is something you'd see on Instagram and double take it's in Wales and yet the village itself isn't the sort of place you'll see on a postcard. It's not got the cobbled streets of Tenby or brightly coloured houses of Aberaeron but what it has is a jaw dropping beach surrounded by awe-inspiring hills and mountains.
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Politically, this is Plaid Cymru territory, with voters choosing them at council, Senedd and Parliament level. The 2011 census found 72% of people in Morfa Nefyn "can speak Welsh". In Gwynedd as a whole that's 65.4%. The first batch of data from the latest census shows the population in Gwynedd as a whole is down 3.7% compared to 10 years ago. Gwynedd council figures show the population in 2016 was 1,012 people. But make no mistake, this isn't a sleepy little Welsh village. This is a tourist hotspot and one of the areas the Welsh Government is targeting because of the sheer number of second homes.
And why wouldn't tourists come? Nestled between the mountains of Snowdonia and the beaches of the Llyn Penisula, you can walk across the beach to Porthdinllaen and the famous Ty Coch pub. But, for some, that influx of tourists isn't all good news. It is not the only place nearby that councillors describe as the "next Abersoch ", the area of Wales with the highest number of second homes. Data from 2021 shows that Abersoch and Aberdaron, has 29.9% of homes which are second homes. Followed by Gwynedd are Tywyn and Llangelynnin (21.1%); Blaenau Ffestiniog & Trawsfynydd (14%); Harlech & Llanbedr (13%) and Porthmadog (12.9%). None of those are within large distances of each other, Trawsfynydd is 42.5 miles from Aberdaron, for example.
There are estate agent signs up in the village. When you look at those on Rightmove, the prices for Morfa Nefyn are pretty eyewatering. The first is a seven-bed detached home for £1.25m, a six-bed detached home is for offers over £995,000. A four-bed, four-bathroom property is £950,000.
You scroll down past the new build three-bed, two bathroom, for £650,000 and another with the same amenities for £649,000. Keep going down the list and a two-bed, one bathroom semi-detached bungalow is £320,000 another equivalent is £285,000. Almost universally, the listings mention the area, and the beach.
In Llanbedr, a village with its charming stone cottages - and traffic issues - a five-bed detached home is for sale with offers in the region of £675,000. A three-bedroom apartment over three floors is £185,000.
It is Abersoch that has the most jaw-dropping price list. A four-bed, four-bathroom, detached house is a whopping £2.85m (that price was reduced at the beginning of June). The four bed, Compass Cottage has a £2.2m asking price. A two bedroom, two bathroom apartment with 860sq ft of floor space is £925,000. A "traditional Welsh cottage" with its four bedrooms and three bathrooms is offers over £650,000.
The Abersoch on White House Drive, is a new development of 18 flats which has a number of listings on Rightmove now. Apartment four is a two-bedroom apartment with three terraces, parking space and views out to the sea. It has an asking price of £925,000. With a £92,500 deposit, Rightmove estimate your monthly mortgage repayment would be £3,865. Welsh Government figures from 2019 show Gwynedd had an average gross weekly earning of £460.50. That, MoneySavingExpert says, means you'll take home £20,074 a year. The figures clearly don't add up if you're a local trying to buy a house.
Speaking to a Senedd committee, Morfa Nefyn town councillor Rhys Tudur said: "What we see here in Morfa Nefyn is that there’s a percentage of 30% of the housing stock that are now second homes, and that’s had a huge impact on house prices. It’s a very attractive place for those who want summer properties. The village is called 'the next Abersoch', which has a higher percentage still of second homes. What it means is that young people can’t live there at all, and they’re local young people, of any profession—they find it difficult to live in that area."
Similar houses, he told the committee, just eight miles apart can vary in price by around £100,000. "You have Nefyn and Chwilog, which are about eight miles apart, although Chwilog is more than a mile away from the sea. It's not a stretch to say that the same houses are £100,000 cheaper in Chwilog. The result of this is that you have a retreat in the area where people speak Welsh. In those tourists areas, you won't have the Welsh language being spoken, and that would be a disaster. That's what we see at the moment as a pattern. There's been a decline in the number of children going to the school in Morfa. There have been forecasts undertaken by school governors that show that there's going to be 10 fewer pupils over the next few years. That's a huge hit to the community and the confidence it has in sustaining itself."
Other witnesses raised the impact on the Welsh language as a big concern. The amount spoken as a primary language in coastal areas, where second homes are greatest, is at its weakest compared to other parts of the county.
So who is buying these houses? In Abersoch we know it is a high prevalence of people buying them to rent out to holidaymakers. The window of one rental firm shows you can rent properties for anything up to £3,750 a week. Number 3 Stryd Penlan sleeps eight in four bedrooms and has four bathrooms and prices range from £2,250 a week to £3,750. Prices at Compass Cottage which sleeps eight in four bedrooms range from £1,500 to £3,000.
There is a balance to be struck. Local business people will admit they need tourists to survive so they don't want any clampdown to stop them coming altogether but they can all name someone who has had to move out of the area because they can't afford a home where they grew up, and there are plenty of stories about people selling one property in a peak area because they can then buy not just a house for themselves but others for their children or relatives. People can tell you about the 12 seafront homes where just two remain in local hands or the villages you walk around and see nothing but key boxes on the door frame, the usual indicator it is a holiday let.
In recent weeks and months the Welsh Government has announced more of its plans to clamp down on second homes in areas like Morfa Nefyn, and the other places listed above. Not everywhere in Wales is impacted, but some are disproportionately. There are fewer than five second homes in Wrexham, Torfaen and Blaenau Gwent, but in places like Gwynedd, that number is 5,535, 9.5% of all of the county's chargeable dwellings. So how are those plans going down in the places where the problem is most acute?
The Welsh Government's plans are the following:
- By the end of this summer three new planning classes - a primary home, a second home and short-term holiday accommodation. Councils will be able to require planning permission for change of use from one class to another.
- A statutory licensing scheme for all short-term holiday lets, making it a requirement to obtain a license
- A potential to increase land transaction tax rates for second homes and holiday lets to be applied in their local area
- From April 2023, 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%
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.
But bodies which represent accommodation groups say these measures are targeting the wrong thing. When I asked one how the announcements from Cardiff Bay had gone down they summarised. "Very badly".
Wales Tourism Alliance, the Professional Association of Self Caterers UK and UK Hospitality Cymru have warned that the tax changes alone could force as many as 30% of self-catering businesses to close or sell up. They say they have surveyed 1,500 self-catering businesses across Wales but their evidence has been ignored.
There is a difference, they (and many others) are at pains to say, between second home owners and short term holiday let owners and the distinction is important. "Our data shows that more than 30% of professional, local self-catering businesses will face having to sell or close because of this legislation. These are not second home owners," the trio wrote in a letter.
A particular fear for the industry is the changes to the days for which a property needs to be let. The fear is that outside of the main hotspots, that 182-day occupancy threshold will be unachievable. If the tourism season runs from March to October properties would need to be let for between 75 and 80% of that period. Conservative MS Sam Rowlands, who represents North Wales, told the Senedd in July: "These measures are likely to cripple the industry and force many hard-working and local businesses to go bust". The First Minister bit back saying changes to the basis on which holiday lets can be registered for either the council tax or for business rates, will "make sure that only genuine businesses making a significant contribution to local communities are able to take advantage of the business rate system, and there will be a visitor levy reform brought in front of the Senedd during this term and that too will strengthen the industry, because it will allow local authorities to raise modest sums of money, as are raised right across the world, from people who choose to visit Wales, so that that money can be reinvested in those communities, supporting the conditions that make tourism a success."
Ashford Price runs the National Showcaves Centre for Wales. He says the 182-day limit is an "unobtainable figure for the majority of operators in Wales". He's run the Brecon Beacons resort for more than 40 years and says never in that time has he managed to let the 20 cottages for that 182 days. Partly that's due to the Welsh winter weather.
"To say that the future looks bleak for many genuine Welsh self-catering operators is an understatement, as there will be no future for many of the 4,700 people currently employed within the Welsh self-catering sector from April 2023."
The measures being introduced aren't retrospective. So even if someone already paying £1m for their property in Abersoch decided the 300% council tax increase - often countered as a sum that someone buying a house for more than £1m can easily absorb - was the final straw, that house isn't suddenly going to go back on the market at a price a first time buyer can get it at. It means a giant and reluctant acceptance, that some places are already lost, but that not everywhere has to be.
Mabon ap Gwynfor, the Plaid MS for Dwyfor Meirionydd, said: "What I had to grapple with when I started to discuss this was we have to work from where we are now. So accept that some properties are lost, some communities might be lost."
However, he said other elements of the government's plans are to develop a local mortgage and greater funding for local buyers as well as ideas to give a local community first refusal on a property. "Once all that happens, once you get all those ducks in a row, and all those policies in motion, then what you hope you find is the dampening of the property market, locals being able to bid and afford to buy them and there's a cascade effect".
The licensing scheme will have different implications depending on where you are.
In a city like Cardiff where people will put a room in their home on sites like AirBnB for the Six Nations or big gigs, they will need to be licensed, just as the 5,535 in Gwynedd or 2,755 on Anglesey will need to be. Cardiff, as we see for the headline events that bring millions of spending to the city, needs rooms. Estimates are that it has around 5,500 hotel rooms. The capacity of the Principality Stadium is 74,500. When an event like the Champions League Final came, those were taken almost immediately by corporate bookings, fans needed those AirBnB rooms, as they could if dreams for Cardiff holding Eurovision come true. The plan is for the required licensing assessment to be carried out at a council level. Yet few councils will relish that given the cost and staff power involved and when we asked the First Minister about it, he said extra funding would be provided for when the scheme came in, but councils would then be expected to meet it themselves.
It is however right, Mr ap Gwynfor, says, that it is councils who have control of this. "They know the area and I think powers should be devolved to the most local level possible. You empower communities, you don't centralise power away from communities. The Welsh Government don't know Llanbedr, they don't know the Brecon Beacons. They don't know the communities."
There are questions too about farmers, many of whom were advised to diversify and convert outbuildings to second homes. Glyn Roberts, who is chair of the FUW, has said that "the Welsh Government has encouraged farmers to diversify over recent years". "It is clearly understood from FUW members that for many diversified farm businesses, actually letting self-catered accommodation units for at least 182 days per year will be practically impossible given the nature of farming - which generates the largest proportion of income for such businesses - and the sheer competitiveness of the holiday let market."
A pilot is running in Dwyfor with a focus on shared equity schemes and renting out empty homes. Dyfrig Siencyn, joint chair of the Welsh Local Government Association Rural Forum and Joint WLGA spokesperson on rural affairs described the Welsh Government's intervention as "historic" but the pilot was like "a young child learning to crawl". The measures being taken were "soft interventions".
When he spoke to the Senedd, Councillor Rhys Tudur said: "What we don't have in Wales is something that identifies the more beneficial kinds of tourism and those kinds of tourism that are more damaging. It's a shame that we haven't got that clarity at the moment."
Mr ap Gwynfor supports the Welsh Government measures - drawn up with his party as part of the co-operation agreement.
There is a need to close the loophole about business rates and council tax for short term holiday lets, he says. Second homeowners were using their property as as a short term holiday let, to supplement their income and as a second home to supplement their lifestyles and then also claiming the Covid grants to businesses impacted by the pandemic. "They were abusing the system completely so how do you resolve that, how do you stop second home owners abusing the system?
"A second home is one thing, a short term home is a different thing. The 182 days is a short term holiday let target, a second home is a property used by a family and individuals for their own personal use for a period of the year. A second home brings no economic benefit to an area. Those people could pop into a local shop for maybe six days a year but if that wasn't a second home or if someone lived in it, they'd be in it for 300 days.
"Your legitimate business owners, your genuine short term holiday let owners who make their living off this and this is their income, that is how they sustain their family and keep their family in the communities they will be able to reach that because they are genuine business people, they can market it properly, they can give the discounts to various groups of people to make sure that people attend and come in you know. We've heard from some legitimate businesses that they can do the 182 days."
The people who have bought a property solely to put it on AirBnB are the problem, he said. "These people have flooded the market to legitimate businesses that have been going for decades and his community is thriving, successful small businesses are now struggling because the market is so saturated with Airbnb and Vrbo [another holiday let website]". They are chosen because the platform is easier to use and there's no regulation. Local companies like Dioni is a short term holiday let company, they will check any property for standards before marketing it.
"The industry told me they wanted it regulated, they wanted it licensed". "If you're properly licenced if you reach a certain threshold, if you reach a certain standard, you will survive," he said.
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