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.