Two of Cornwall’s MPs and the county’s head of housing have welcomed the budget announcement that tax relief on holiday lets will be scrapped in a bid to increase the availability of long-term rental accommodation.

However, rural landowners are less happy, saying holiday property owners contribute to the local community’s economic vitality.

Around 800 families are currently living in emergency or temporary accommodation as an increasing number of private landlords turn to the lucrative holiday trade and let their properties on Airbnb and other sites.

The growth of holiday rentals is said to have exacerbated the housing crisis in Cornwall, which currently has over 20,000 people on the housing list.

Steve Double, Conservative MP for Newquay and St Austell, said: “This is something I’ve been urging the Government to do for some time now.

“There’s an imbalance in the tax system which makes it much more attractive in Cornwall for landlords of holiday properties than for residential landlords. So a move to level that playing field is very welcome.

“I await to see the detail but in principle anything that encourages people to be residential landlords rather than holiday lets and help the housing situation has to be welcomed.”

Scott Mann, North Cornwall’s Tory MP, said: “Mortgage Interest Tax Relief (MITR) for holiday lets is a loophole I have been campaigning to close since 2021, and in the last year, I wrote to the Chancellor twice urging the Treasury to act.

“This is part of my plan to encourage more landlords to rent their properties long-term to local people, rather than as short term lets to tourists.

“I’m very pleased that the Chancellor has listened and closed the loophole in today’s budget.”

Cllr Olly Monk, Cornwall Council’s Conservative portfolio holder for housing, added: “Anything that encourages the supply of long-term let properties in Cornwall has to be a welcome step forward.

“Will it cause droves of people to stop doing Airbnb and the holiday let market and go back into the private sector? Who knows but I hope it does, but a lot of those buy-to-let properties are in areas that would still be very expensive as privately owned market-let properties.”

CPRE, The Countryside Charity – previously known as Council for the Preservation of Rural England – has also welcomed the move but says even more needs to be done to protect rural housing.

Roger Mortlock, CPRE chief executive, said: “The Government’s plan to scrap tax breaks for short-term lets is a step in the right direction, but these changes should be applied to all second homes – a major cause of the rural housing affordability crisis.

“Airbnb-style short-term lets have led to ghost towns and villages in some parts of the country, driving people out of the communities that depend on them.

“A secure and healthy home is a foundation for a decent life and one that many people in rural communities are being denied.

“Much more is needed to fix a crisis that is tearing the soul out of rural communities.

“We call on the Government to redefine ‘affordable’ in line with local incomes, not market rates, set and deliver ambitious targets for new, genuinely affordable and social-rent rural housing, and urgently bring forward its new regulations on short-term lets.”

However, the Country Land and Business Association – formerly the Country Landowners’ Association – is less happy.

President Victoria Vyvyan said: “Rather than helping the tourism sector by permanently reducing VAT to make rates internationally competitive, the Chancellor is squeezing holiday let owners and stifling businesses that create jobs and support the rural economy.

“By converting unused or underutilised properties, that may not be suitable as homes in the private rented sector, into high-quality holiday accommodations, property owners contribute to the local community’s economic vitality.

“Targeting them will not help solve the housing crisis.

“The current tax rules for Furnished Holiday Lets provide a crucial support mechanism, strengthening the resilience and viability of many farms and rural businesses that in turn enables them to invest in their work looking after the environment and feeding the nation.

“Abolishing the tax relief shows a disregard for small rural businesses that often have narrow margins and face a constant need to reinvest.”