Holiday homes have seen a ‘dramatic plunge’ in popularity following a tax crackdown, said Solomon Investment Partners.

The property investment consultants stated that landlords and second home buyers have been deterred from purchasing holiday homes after the government stepped in to double and even quadruple tax on UK holiday homes. The move was made to support locals who were being priced out of their area by holiday home buyers.

Local councils are now able to charge double council tax on second homes that are not let out or used for 70 days a year. The Welsh Government has gone a step further and allowed local councils to charge quadruple council tax on holiday homes.

It found that the greater tax burden has caused a drop in buying competition of up to 64% in some areas, with seaside towns mainly affected. Across the UK demand for holiday homes has fallen by 10% compared to last year.

Senior investment consultant at Solomon Investment Partners, Ian Williams, said: “Holiday home demand has fallen sharply.

“People are no longer looking to buy these holiday homes – mainly in seaside towns. Across the UK, it’s reduced competition by about 10% so far up to May 2022 from the previous May. By contrast, the 50 largest cities and towns in the country did the opposite, seeing competition jump back up by about 13%. This shows that towns, cities and more urban locations are seeing a lot more interest in people looking to invest in property, which aligns with the rush back into cities post-COVID.”

10 biggest drops in buyer competition for seaside homes

1. Ilfracombe, Devon: -64%

2. Brixham, Devon: -40%

3. Deal, Kent: -40%

4. Prestatyn, Denbighshire: -37%

5. Barton On Sea, Hampshire: -36%

6: Porthcawl, South Glamorgan: -35%

7. Canvey Island, Essex: -35%

8. Cromer, Norfolk: -33%

9. Abergele, Conwy: -32%

10. Bexhill On Sea, East Sussex: -31%

Source: Rightmove