That brings us to item 5, a statement by the Minister for Climate Change on second homes and affordability. I call on the Minister to make the statement. Julie James. 

Diolch, Llywydd. This Government has a strong, proud record in building affordable housing. Our programme for government reflects our continuing commitment to this with our ambitious target of delivering 20,000 low-carbon social homes for rent this term. But, for some people living in some parts of Wales, an affordable home is beyond their reach because of a combination of rising house prices and a disproportionate number of second homes and short-term holiday lets.

We want young people to have a realistic prospect of buying or renting affordable homes in the places they have grown up, so they can live and work in their local communities. High numbers of second and holiday homes in one area can threaten the Welsh language in its heartlands and affect the sustainability of some rural areas. We are a welcoming nation and tourism is a major part of our economy, bringing jobs and income to many parts of Wales, but we also don’t want ghost villages in seasonal holiday spots—places where no-one is at home during the winter months.

These are complex issues and there are no quick fixes. What may be right for one community may not work for another. We also need to avoid unintended consequences. Certainly, we need to take communities and the people living there with us if we are to find and implement effective responses. And, in a context where commentators point to a lack of robust evidence about what works, we have to forge our own Welsh way, developing our own evidence and our own solutions. I think we all acknowledge there is no one silver bullet here, and we will need to bring forward a range of actions.

In July, I set out the Government’s three-pronged approach: addressing issues of affordability; using our regulatory framework to better manage additional second homes and short-term holiday lets; and, using national and local taxation to ensure second home owners make a fairer contribution.

Our consultation on local taxes for second homes and self-catering accommodation has just closed. Almost 1,000 people responded to the consultation, which shows the strength of feeling and the range of views. We are working through these and will respond with the next steps to ensure a fair financial contribution is made, which reflects social justice.

In his excellent report, 'Second homes: Developing new policies in Wales', Dr Simon Brooks recommended we pilot changes to planning law as a means of addressing excess numbers of second homes in specific local communities. Over the summer, we've been working with Gwynedd Council, and I would just like to put on record my thanks to the council for the constructive and positive way they have engaged with us. Starting in January, we will run a phased pilot to test a number of interventions in Dwyfor, in Gwynedd. This will be the first time we have intervened in the market to support local people to live in their local communities in this way. Dwyfor is one of our Welsh-speaking heartlands. It's an area where second homes range from around one in five to almost half of the available stock.

The first phase of the pilot will include a range of practical support to help people access affordable housing, and will link to our existing and new interventions in a way that really makes a difference. We have already started work on preliminary actions, so we can start delivering with our partners as soon as possible. I will say more about these after the finance Minister has published the draft budget next month, but we are keen to look at shared equity schemes, rental solutions and what we can do with empty homes.

In phase two, we will look at the planning system itself. We know that the planning system plays a key role in supporting our efforts to manage additional second homes and short-term holiday lets. The evidence suggests issues around second homes are usually localised rather than nationwide. Planning law, though, applies across the whole of Wales. So, today, I am launching a consultation on changes that would enable local planning authorities to switch on the need for planning permission to change from a primary home to a secondary home or a short-term holiday let.

We are proposing changes to the use classes Order, which would, if implemented, create specific use classes for primary, secondary and short-term holiday residences. Alongside this, the consultation seeks views on proposals to amend the general permitted development Order. These would make movement between these classes permitted development. Individual planning authorities would then be able to decide whether they wished to remove the permitted development rights through what's called an article 4 direction. If implemented, this would mean that planning permission would be needed to move homes between the different uses of primary, secondary homes and short-term holiday lets in the areas where the local authorities had decided that was what they wished to do. We will also ask about possible changes to 'Planning Policy Wales', referencing any changes.

We are not prejudging the outcomes of this consultation or the local consultations on article 4 directions. It is very important to hear and take account of all voices, and we and our partners must and will do that. If there is broad support for these changes, we will be able to change legislation and evaluate the impact. I anticipate that that can begin to happen from next summer. If Gwynedd Council and Snowdonia National Park decide, after consultation and on the basis of their evidence, to use their powers in Dwyfor, we will include the impact of this within the pilot.

We are currently working with a contractor on the feasibility and shape of a statutory licensing or registration scheme for all holiday accommodation, including short-term lets. As part of this work, we will engage with local partners with a view to establishing a voluntary scheme in the pilot area, to draw lessons to inform the operation of a statutory scheme. While Dwyfor will be the focus of the pilot, an independent evaluation will include ongoing action learning, so that other areas can engage, influence and learn from the pilot. We want to know the combined effect of the actions we take as part of our three-pronged approach.

One of the things we already do know is that there are too many homes sitting empty and idle. To help address this, the Welsh Government will grant aid Gwynedd Council £2 million for the purchase of empty homes for social rent. At least £1 million of this must be spent in the Dwyfor pilot. A further £1 million each will be available to Anglesey, Ceredigion, Pembrokeshire and Carmarthenshire councils for the same purpose. The funding will help us assess the impact this has in communities in need of social homes and where Welsh is a community language.

I have today set out the next steps to address the complex issue of second homes to ensure people can live and work in their local areas. There are no easy answers here and I look forward to working with Gwynedd Council through the Dwyfor pilot, but also with Plaid Cymru, to develop these measures further, as part of the co-operation agreement that the First Minister announced yesterday. We are committed to finding solutions that will make a real and lasting difference. We will continue to explore everything that can be done and develop the best possible policy approaches. I look forward to your support in this. Diolch.

Thank you, Minister, for bringing this statement to the Chamber today. Before I begin, I would like to refer Members and members of the public to my own register of interests as regards property ownership.

Now, yesterday, we all heard that the Welsh Government announced their coalition deal with Plaid Cymru. Many of us who've been here some time now believe that that was very heavy on rhetoric but light on detail. Just one day later, how surprising it is to find that the Welsh Government has now announced that it will grant £2 million in aid to Plaid Cymru-led Gwynedd Council for the purchase of empty homes for social rent. Minister, whilst it's really good that you're providing £1 million for other local authorities, Wales does have 22 local authorities, and I do think that, once again, this should not be party politically motivated.

I have many misgivings about the statement made today, as it is important that the Welsh Government does not intervene in the market in a manner that has too much of an impact. The Welsh Government needs to be supporting people to buy houses, rather than lowering house prices inadvertently. Therefore, increasing premiums is not the answer, neither is the possibility of enabling local planning authorities to switch on the need for planning permission to change from a primary home to a secondary home or short-term holiday let.

During the cross-party group on housing last week, Shelter Cymru officials present agreed that the tackling of second homes will not solve the issue of housing affordability. The simple fact here is that we need to be building more homes—well, rather, you as a Government need to be building more homes. Around 7,400 new homes are needed annually to meet the demand in Wales, and whilst every electoral term comes, or Senedd term comes, we get promises of what's going to happen, but it doesn't happen. In 2019 registrations of new homes were down by 12 per cent. This is incredibly disappointing given that there are 67,000 households currently on housing waiting lists in Wales, and some of those, a large number, are in the constituency of Aberconwy.

So, Minister, will you confirm what other progress has been made to convert empty public sector land into sites ready for development? You know in the groups that we've had cross-party, you are fully aware that I have pointed this out, that our public bodies have lots and lots of land available, and, in fact, buildings available that would make safe and comfortable homes for those wishing to get on the housing ladder. I haven't seen anything like that coming forward, but have heard the rhetoric by Plaid Cymru many times about how second homes and holiday lets are so bad for us that I feel you're going down that road a bit too quickly.

It was highlighted to me only last week that as many as 10,000 homes—1,000 of these affordable—cannot now be progressed due to Natural Resources Wales guidance on phosphorus. I asked for a statement, in the business statement earlier, from you and James Evans my colleague did also, because we met with leaders, we met with cabinet members, and we met with planning officers of many councils across Wales last week, and they were all saying the same thing: you're asking for more houses to be built, but you're stopping them with these planning regulations on phosphorus. So, you need to plunge this block by either asking NRW to suspend its guidance or through implementing exceptions and phosphate-stripping capability in our drainage systems.

Affordability needs to be addressed by removing the cap on aspiration by cutting land transaction tax. So, whilst I welcome the announcement from the Minister for finance that new legislation will allow taxpayers to claim a refund of the higher rates of LTT where they are replacing their main residence, so as to make Wales their home and economically contribute to our communities, will you be able to confirm the timeline for bringing forward such legislation?

And we do need to confront the issue of empty properties, and, as I say, some of your initiatives are good, but this has got to be done on a far more fair and balanced proportionality. There were 25,725 long-term empty properties in Wales, and four years later—shockingly—this figure has only reduced by 24. The National Residential Landlords Association have proposed removing the second home land transaction tax premium and separating buy-to-let properties from second homes—because, again, I would ask you to tell us today, Minister, what you consider to be a second home—as they are defined in current discourse, encouraging landlords to help address the empty property issue.

As a representative said during my recent round-table, held in conjunction with Propertymark, 'Why are we not incentivising the renovation of empty space above empty shops?' I've heard that for 11 years: 'We're going to bring back all those empty office spaces above shops in our high streets.' I don't know of too many where that has happened. As regards empty shops and taking those shops back, in some instances, if you knock buildings down, you get your value added tax back; if you renovate, you do not. Will you commit to working with UK Government to review this specific situation as a means to help encourage the renovation of affordable central properties and rejuvenate our high street?

To conclude, I look forward to your responses to these most pressing questions and hope that they will give pause for thought over your policy's direction of travel. We want to work with you, Minister. We believe there is an issue, there aren't enough homes in Wales, but there has to be a far more balanced and proportionate response, and this should not be part of any coalition deal with another political party.

I think I detected four questions in that rather long speech, so I'll—[Interruption.] I think there were four, I think I'm right in saying, which considering the length of the speech is quite something. But, there we are.

The first one was about land for house building. Janet Finch-Saunders, because she's part of the cross-party working group, will know perfectly well that we have been working with local authorities right across Wales on their local development plans to identify housing land that is identified in the LDP to understand why it isn't brought forward for housing and to make sure that we've removed all the barriers for that. She would do well to discuss with Propertymark and others how much land banking there is in the private sector across Wales and why the release of housing is so slow, and whether that has any effect on the current house prices, because I think she'd be quite surprised by some of the answers.

The idea that the solution to house building is to remove pollution controls on floodplains is quite extraordinary. I cannot understand at all how the Conservatives can, on the one hand, say that they agree that there's a climate emergency and on the other hand say that we should build on floodplains with phosphate problems. So, I'm not going to even dignify that with an answer, because it's quite obvious what the answer is. Of course we can't build on floodplains where there's a danger of flooding or pollution. So, we have to find other land or we have to find flood defence capability to make sure that that land is available. And I've got absolutely no problem with NRW's guidance on the subject.

The empty homes figures are interesting. They include houses that are, of course, up for sale. She knows that as well from the cross-party group. We have been working very hard to make sure that we have proper figures on empty homes, and we have a number of initiatives in that regard, as she will also know. So, for a very long time now, we have been offering grant aid to people to bring the empty homes back into beneficial use, either for their own use, if they live in them for five years, or to give them to us as social rented homes, where that's suitable.

On VAT, again, Janet Finch-Saunders does not seem to understand that she's a member of a Conservative Party that has not removed VAT on refurbishing homes, or renovation or reuse. Perhaps she would like to address that to her own Government, who have absolutely refused to do so despite their own declaration of a climate emergency.

And the last thing I would say is that, if she honestly thinks there isn't a problem with second homes, then I suggest she gets out more, because in most parts of Wales there most certainly is.

For the record, I have a home where I have a long-term tenant in situ in Aberystwyth. 

Thank you very much for the statement, Minister. There are generations of people who have been campaigning to encourage governments to take action on this crisis, a crisis that's been facing some of our communities over decades. Back at the beginning of the 1980s, my predecessor in Dwyfor, Dafydd Wigley, put forward ideas to tackle the issue of second homes in Westminster, but he was ignored then. We also have to acknowledge the role of Gwynedd Council—and Plaid Cymru leads that council—as they have already done much of the work around this area, and I thank them for their leadership in this area.

The fact that we are seeing concrete steps here to tackle this issue of second homes and affordability in some of Wales's communities is to be welcomed. There is some sadness that it's taken so long, of course, with many communities having seen huge depopulation over decades because of the failure of government after government to take the issue seriously and to take action. But, better late than never, and this range of policies does provide some hope. It's also important that the consultation is staged in a balanced and fair way and the right process and timetable followed fully. We can't prejudice the outcome; every voice has to be heard. We can't, either, risk harming any opportunities we have to take action on any possible solutions. The agreement between Plaid Cymru and the Government that we've heard mention of today already on these specific issues does show that it's possible to work a different kind of politics in Wales. This shows the value of devolution and that it's possible to find solutions in Wales to those problems facing us here in Wales.

We must also recognise that the broader housing crisis is having an impact on communities across Wales. The affordability of homes and rental costs means that many can't pay for a roof above their heads, and I look forward to working with the Government on finding solutions to these problems, too, as we work on that White Paper. Of course, the challenge is therefore huge, but with the political will, the vision, strong policies and sufficient financial resources to deliver these objectives, there is hope for a better future for Wales's communities. 

So, to conclude, I do want to ask a few questions of the Minister, if I may. What assurance and what solutions can we provide to other communities, those outwith the pilot areas, and convince them that they won't be left behind? There will be many concerned about the length of these pilots and the relatively small amounts of money provided at the moment, so how quickly can we expect these other areas to be included in the Government's response once the pilot has been implemented and once we've learnt lessons from this programme, so that every area can see benefits as soon as possible? And is there a commitment to increase the financial commitment on the basis of a successful pilot?

And finally, whilst the White Paper is on the way, as well as talk about rental costs and house prices—and that's certainly to be welcomed—I'd like to ask what urgent steps will be put in place in order to respond to the unsustainable growth in the gap between house prices, rental prices and salaries, which prevent many people from keeping a roof over their heads. Thank you, Llywydd.

Thank you, Mabon. In terms of whether we can roll the pilot out, we've got to get to the pilot first. One of the things that we will be doing is putting an evaluation contract in place so that we can get the data from that pilot as rapidly as is humanly possible so that we can evaluate what we're seeing from the pilot, the effect it's having, and what we will need to do to adjust it, if anything. Obviously, that data is essential for other communities who are looking on to see whether they want to take part in similar pilots, so I would anticipate that we would get the data coming in pretty swiftly—house price data, occupancy data and so on—and we will be able to use that data to assist other areas to do it.

Assuming the planning consultation allows the use class Order to be changed and any subsequent article for consultation done by a local authority comes out that they would like to do this, there's nothing to stop them doing it. What we're doing in the pilot area is assisting the council to go a little bit faster with that with some additional resource so we can get the information from the pilot. So, we're not putting any barriers in the way of councils doing it; we are assisting Gwynedd, who have been extremely helpful and co-operative in this, and it's been a pleasure to work with them over very many months now in coming to this point, to go a bit faster so that we can get that data in. So, the message there is that it's possible elsewhere, but we're going to assist in a particular area of need.

In terms of all the other provisions, we are of course forging ahead with our building of the 20,000 zero-carbon or low-carbon social homes. We are in conversation with councils in the areas with high levels of second homes to identify land in order to do that and to make sure that our RSLs and stock-owning councils are stepping up to that. I'm really pleased that that's going very well, despite the fact that we have major global supply chain cost increases. So, we've been able to help with that for our SME builders right across Wales to make sure that they stay in business, and to assist with additional moneys into the social housing grant to assist with the supply price inflation issues, which are affecting, as I'm sure every Member of the Senedd knows, all building work, right across the Chamber. 

The last bit was just around what we're doing to make sure that the rented accommodation market recovers in areas of high tourism and second homes. One of the things we're wanting to see in the pilot is whether the registration of holiday lets on the same basis or similar to the Rent Smart Wales arrangements will have an effect on whether people choose to stay in the long-term rented sector or they still want to go across to the holiday lets. So, one of the points of the pilot is to pilot whether we can have an influence on whether people make that decision or not, in order to increase the supply of long-term rented accommodation in large numbers in the particularly beautiful parts of Wales.

I very much welcome the statement by the Minister. If we had a surfeit of housing, then second home ownership would not be a problem, but unfortunately, we have a shortage of accommodation across Wales and in certain parts of Wales, a massive shortage. I find it morally wrong that some people have two or more houses and others are either homeless, living in very poor quality housing or living in accommodation that is totally inadequate for the numbers living in it.

Does the Minister agree that the large-scale building of council housing has to be part of any housing solution? We know that the only time we had house building and demand in equilibrium was during the time that large-scale council housing was built in the 1950s and 1960s.

Short-term holiday lets is a growing problem, even in Swansea East. I will again ask that properties for short-term rent are controlled via the planning system; it just happens and it causes huge problems to the neighbours. I agree that the testing of something in one area is a brilliant idea, and I hope that other Ministers will learn from that so that we can test things before we implement them across the whole of Wales.

Finally, can I again ask that housing is excluded from small business rate relief? That is one of the things that distorts the market, and allows people to make lots of money by not paying any council tax and not paying any small business rates. I think we need to make sure that housing is for people, not for profit.

Thank you, Mike. I completely agree with you about the large-scale social house building. That's why we've got the 20,000 social homes for rent in this Senedd term. Councils have only recently, of course, been removed from the Conservative cap on the housing revenue accounts, and they've done remarkable things since then in stepping up their house building, having to reconstitute much of their skills and talent base that they'd lost in the 40 years since Thatcher took the right away from them. I'm really pleased with the success that they've had in doing that, and we are certainly working with the 11 stock-holding councils to ramp that up right across Wales in conjunction with registered social landlord partners as well.

In terms of the short-term rents, one of the things that we are very determined to do is implement the Renting Homes (Wales) Act 2016. The renting homes Act changes the relationship between landlords and tenants and will really help in the short-term rental section. It will give landlords certainty of income and better tools to make sure that their good tenants stay in place. And it will give tenants better tools to use against the rogue landlords that we have very few of in Wales, but where we do encounter them, we do need to deal with it. I'm very pleased that we will be able to do that, and we're on course to implement that as we go.

Of course, the business rate exemption point is part of the consultation that is now complete. We are just analysing the 1,000-odd responses that we got from that, and we'll be able to come back to the Senedd with the outcome of that as soon as we've been able to analyse those responses.

Thank you, Minister, for your statement. As a member of the Local Government and Housing Committee, one of the things that has struck me the most is the lack of any reliable and quantifiable evidence on what is actually happening in communities that appear to be affected by second home ownership, despite the fact that this Government is looking to change planning policy in this country to deal with it. I recognise that, in some places, there is an acute issue with housing, but without proper investigation it is only ever going to be speculative as to what are the causes of the housing problem. Your own research document, 'Research on second homes: evidence review summary', published in July this year, which no doubt has helped inform your statement, has very few references to any evidence collected in Wales whatsoever, with most of the evidence used coming from a wider European perspective, even as far as Turkey. Furthermore, the report states that

'the literature does not enable us to either delineate or quantify the impact of second homes in Wales with precision in order to fully understand the breadth of impacts. Evaluating and addressing the impact of second homes on housing markets and communities therefore remains largely a matter of judgement'.

Can the Minister therefore clarify if this Government has plans to collect any relevant data about the actual impact of second homes in Wales in order to guide their policy rather than simply collect evidence that just assesses the impact of the second home proposals you've just announced? Thank you.

The very short answer to that is 'yes, we do'. We are collecting a range of evidence already, and of course we'll be evaluating the pilot. I understand the evidence report that he's citing, but I think the evidence of our own eyes is just there for all to see. The house price boom that we're currently experiencing right across the UK and the very, very heated market in Wales is pricing people out of the market as we speak. You've only got to look at the local newspapers to see the increase in house prices and the speed with which the houses are being sold, sometimes to people who haven't even seen them. That's not being sold to people who want to live in those houses, that's being sold as an investment. One of the problems with the UK housing market is that it's not just a home, it is an investment, and that really does confuse the figures that we're looking at. So, the empty property figures that Janet Finch-Saunders mentioned, for example, include houses up for sale. So, it's very difficult to do that, but we are very determined to improve the data, and of course I just answered in response to Mabon that we will be evaluating the pilot very carefully, with a contract put in place to do just that.

John Griffiths, Chair of the housing committee.

Diolch yn fawr, Llywydd, and yes, I will be speaking in my capacity as Chair of the Local Government and Housing Committee today. I thank the Minister for her statement. Our committee will be looking at housing in the round over the course of this Senedd term—the availability of affordable, good quality housing that meets the climate change challenges. Our first work stream is, however, on second homes—a subset, really, of that overall picture—and we recently launched a public consultation as part of this inquiry, which will be open until mid January. We hope to receive a wide range of responses in order to gather evidence, and we hope that will come from a spectrum of different perspectives so that we hear all points of view on these very important matters. 

I do think the Minister's statement today is very timely as we begin our inquiry. One of the main strands of our work will be to examine the recommendations of Dr Simon Brooks in his report, and we will also look, of course, at the Welsh Government's response to those recommendations. Part of that governmental response was to take forward the pilots and, obviously, to evaluate them in due course. I wonder, Minister, if you could say a little bit more about that exercise and what were the criteria used to decide on the pilot area. Obviously, the extent of the issues in that particular part of Wales is very important, but I wonder if you could add to that with any other criteria that were used. And also, if you could say anything about the extent of community interest in becoming pilot areas. It would be good to know what the extent of that interest was. 

It's very topical, of course, this issue, and it's had quite a deal of media attention in recent months and, indeed, over quite a long period of time. And I think now particularly in light of the pandemic and its potential impact in terms of increasing people's ability to work from home, and appreciation of the environment and a desire to live in attractive coastal and rural areas, I wonder if the Minister agrees that that's an added dimension at the moment that needs to be factored into consideration of these issues. 

We haven't yet received enough evidence to draw any conclusions, but we do know this is a very complex issue. As Joel said, we've heard that more research and data are needed in order to fully understand the scale of the issue, and we'll continue to explore that through our work. We're also eager to better understand where the balance lies between the economic benefits of second homes and at what point you reach what I think is often described as a tipping point, where potential economic benefits are outweighed by social harm.   

So, we will continue our inquiry into the new year when we'll be inviting stakeholders with a range of views to present their evidence, and we'll also be inviting you, Minister, to give formal evidence to the inquiry before we consider our conclusions and issue a report. Diolch yn fawr.  

Thank you very much, John Griffiths. I'm really looking forward to working with the committee on this, so I'll be delighted to come and give evidence to the committee on their inquiry. This is a big issue right across Wales, actually. Some areas, though, have a real hotspot for it. The pilot was chosen because we had been in conversation with Gwynedd Council for some considerable time before hitting on a pilot about the problems in Gwynedd. Gwynedd has one of the highest levels of second homes, as in people who aren't using them for their primary residence, in Wales, and it's a concern that the council had expressed to me in my previous role as the Minister for Housing and Local Government on a number of occasions. So, we were able to work well with Gwynedd Council, who were able to work with their community to make sure that the community wished to have the pilot. So, that's how the pilot came to be. We were also very keen to pilot it in an area with a high level of second houses and holiday lets, and in a Welsh-speaking area, for obvious reasons, because some of the concerns are around what happens to the Welsh language if you have a large number of people who don't live all the time in the community.    

I'd just like to make the point, though, that you have absolutely hit on, that during the pandemic, people became aware that they could work from pretty much anywhere as long as they had a decent broadband connection, and are moving out of the cities. My own personal point of view is that Wales is a welcoming nation. If you want to come and make your home in Wales and integrate with the local community and put your kids in the local school, you are very welcome. That is a completely different thing to saying that what you want to do is to have a lovely house on a coastal path somewhere, overlooking a beautiful sea, that you're going to come to three weekends a year. That is a very different kettle of fish altogether. Expanding our communities because people want to come and live and work and be in them is one thing. Emptying them out, or hollowing them out, because we have a large number of houses that are largely empty, is quite another. 

We know that we want sustainable communities. Sustainable communities are communities that can sustain things like shops and pubs and community facilities. If there aren't enough people in the community to do that, then the whole community has that tipping point that you mentioned. So, the pilot is there to see whether the interventions that we are suggesting will make a difference to that, whether the people of Dwyfor are happy with the interventions or have other things to suggest, and the data coming back from it will be invaluable. It's an action learning contract that we're letting for the data from the pilot. So, I'll be delighted to be able to share that with Members of the Senedd and with the committee, John, as the data starts to come in, so we have a dynamic set of data that we can share.

Thank you, Minister, for your statement today. I'd also like to welcome the comments you just made there to the Chairman of the committee and thank you for your ongoing communication, as a member of the Local Government and Housing Committee, as well. In line with your statement, Minister, I agree with you that we need to understand the issues fully, in line with the comments from Joel James there as well, gathering the evidence so that we can get a full picture of some of the challenges, but also, as you pointed out a moment ago in one of your responses, remembering the acute challenge, perhaps, that this can be in some communities, which are vastly different from one community to the other, even just a couple of miles apart from each other. You acknowledge in your statement, and I'll quote, the

'need to avoid unintended consequences' with any measures that may be implemented on this issue. As you will know, a huge concern that I have with the second homes discussion at times is the tone of the debate and the possibly damaging effect it could have on our tourism sector in Wales. As you will be aware, it is a vitally important sector in my region of North Wales, where it supports tens of thousands of jobs and contributes around £3.5 billion a year to the economy. So, Minister, what work will you undertake, with the Minister for Economy, to ensure that Wales continues to be seen as an open and welcoming country? Yes, for those 11 million overnight domestic visitors, for the 87 million day visitors, and for the 1 million international visitors that we welcome year on year, who come to Wales, spending their money, supporting our jobs for local people, and seeing the exceptional attractions that our country has to offer. Diolch yn fawr iawn.

Yes, absolutely, Sam Rowlands. I completely agree with that. Wales is indeed a welcoming country, and one that is very proud of its tourism offer and the welcome we keep in the hillsides, to quote the famous song. So, absolutely. This isn't about not welcoming people who are coming on holiday to spend their money with us and spend their time with us and share their life and experiences with us—of course it isn't—but those tourists want to come to vibrant communities. They don't want to come to shell towns where there are no shops and no pub, nothing, because it can't sustain itself through the winter months when there's nobody there. People want to go to a vibrant community. When I go as a tourist to different parts of Wales, I want to see a vibrant community there. I don't want to see a hollowed-out shell with just nothing but holiday lets. So, this is all about the right level and the sustainability. Frankly, I think it's essential to the tourist offer. You don't want to go to what's effectively a holiday park; you want to go to a vibrant town or village or wherever you're going, and you want to see the way that the locals live their lives, because that's part of the experience of the tourist offer.

So, this is all about the balance. It's about making sure that people can grow up, live, and expect to carry on living in the community that they've grown up in and feel part of, and then welcome the visitors in numbers, because of course that will be very much part of their economic offer. So, it's all about the balance, and as I said, I also make the distinction between people who are moving to Wales and making their home here, who are very welcome, and people who are just using it very occasionally for one or two weekends, who really do have a very bad effect on the economy, because that house would otherwise be supporting a family or a tourist offer that would be in use all the time and would therefore bring economic benefit to the area.

Thank you for your statement, Minister, and I welcome the action being taken by the Welsh Government. The lack of affordable housing across the UK is an issue acutely felt by younger generations. Many are unable to get a mortgage and feel trapped within the private rented sector, paying off the landlord's mortgage instead of being allowed to pay off their own. Often, tenants can be paying far more in rental payments than they would be in mortgage repayments and yet they are told that they cannot afford a mortgage. 

What steps will the Minister take to encourage banks and building societies, particularly community banks such as Banc Cambria, to take the historic rental payments of tenants into account when offering mortgages? And will the Welsh Government introduce rent controls to help those struggling within the existing private rental sector? Diolch.

Yes. Thanks, Carolyn, those are two very good points. We have been talking to some lenders about whether or not we could devise a scheme that allowed a long rental record of perhaps more than the mortgage to be taken into account on ability to pay. Often, though, a deposit is also a problem for people renting, because getting their deposit together can be really problematic. So, one of the things that we're going to pilot in the Dwyfor area is a slight change to something called Homebuy. We have a scheme called Homebuy that I think you're familiar with, where we assist people to buy a house by taking a public equity stake in it, effectively, and then, when you sell the house, you pay back the equity stake and you sell the house to whoever you want and off you go into your life. In the pilot area, we're going to change that so that the equity stake stays in the public sector for that house. So, when you sell, you sell your bit of it and then somebody else can come in and take advantage of that house, to see whether that keeps those houses in circulation for local people in a better way, and that's part of the pilot approach to see whether it works or not. If it does work, then we can look at extending it elsewhere and if it doesn't then we can look to see what else we can do. We're also looking to see what we can do with lenders, including the community bank and other lenders who've been very helpful, to see what we can do to assist people to get assisted mortgages using rental records as proof of affordability.

In terms of rent controls, we have, as part of the co-operation agreement, agreed to look at a White Paper on how that would work; we will want to do a consultation on that and make sure that there aren't any unintended consequences. In particular, I'd be concerned that private sector landlords would not then bring their houses up to the standard that we expect them to be, because they wouldn't be getting the income from that. So, we just need to be careful that we do the right thing for our tenants and we do the right thing for our housing stock, and our landlords, of course. I'm very keen to offer landlords a scheme that allows the Government to bring their homes up to standard, whilst allowing us to give much longer term rental agreements to tenants in those houses, and then give back the house to the landlord after a long period. That way, we keep the houses in the rental sector and we bring them up to standard. I fear that many good private sector landlords just don't have the wherewithal to bring their houses up to standard. So, one of the things we'll be looking at is the interaction of all of these various things to see that we just hit the sweet spot where we get the right level of investment and we get the right amount of security of tenure for the tenants.

And finally, Mark Isherwood.

Perhaps I should start, given the Minister's comments, by declaring that, in my previous employment working for a building society, I worked with Tai Cymru to introduce a number of low-cost home ownership schemes in Wales.

But last Friday, I visited Penmachno in Conwy with the rural futures programme funded by the National Lottery Community Fund. Whilst there, local residents showed me the number of properties in the town centre that were now Airbnb properties—they looked in very good condition, but nearly all of them were empty—that were previously occupied by local people. They presented me with a detailed submission with evidence, and asked me if I could hand this to you personally. Could I arrange to hand this to you or one of your officials?

Yes, I'd be delighted to do that. We're looking for those kinds of enterprising schemes to see what we can do to bring houses both up to standard and back into beneficial use, so I'd be delighted to do that, Mark.

Thank you.

I thank the Minister.