The total number of second homes and holiday lets peaked at 347,000 in 2024 before falling to 336,000 in 2025, after the government reduced tax advantages for short-term rentals and gave councils greater powers to increase council tax on these properties, the campaign group found.

Generation Rent says the decline marks a reversal of a decade-long trend which saw holiday lets and second homes grow sharply, particularly in tourist hotspots, making it harder for local renters to find long-term accommodation.

Between 2015 and 2022, the number of holiday lets registered for business rates rose by around 35,000, while the number of second homes registered for council tax increased by roughly 12,000.

The subsequent fall in numbers follows a package of reforms introduced between 2022 and 2025, including tighter eligibility rules for holiday lets to qualify for business rates, the removal of mortgage interest tax relief for holiday let operators, and new discretionary powers for councils to charge council tax premiums of up to 200% on second homes.

More than 70% of councils in England are now charging a 100% council tax premium on second homes, with around 170,000 properties subject to the higher charge in the current financial year.

The research highlights regional disparities, with holiday homes continuing to rise in some areas despite national declines.

Generation Rent also points to councils such as Kensington and Chelsea, which is not currently charging a second homes premium despite having nearly 8,000 second homes accounting for around 9% of its housing stock.

Generation Rent deputy chief executive Dan Wilson Craw says: “Everybody needs a secure home they can afford, but in many parts of Britain, short-term holiday lets have been driving families out of their communities as landlords have switched from tenants to tourists.”

He says: “The recent policy changes appear to have started an encouraging decline in the number of holiday homes, though it seems that some owners have responded to the second homes premium by switching their tax status back to holiday lets.

Wilson Craw adds: “That means there is still more work to do to bring homes back into residential use.”

“The government should give local authorities in England powers to license holiday lets and limit their number to make sure communities can thrive.”