Stretching across 30 miles of rolling farmland, sandy beaches and dramatic cliffs overlooking the Irish Sea, the Llŷn Peninsula is a dreamy spot for a quintessentially Welsh holiday. Once travelled by pilgrims en route to medieval Christian pilgrimage site Ynys Enlli (Bardsey Island), the peninsula and its surrounding areas of Ynys Môn (Anglesey) and Eryri (Snowdonia) are home to two Unesco World Heritage Sites (as well as the brilliantly bizarre Italianate village of Portmeirion). The first includes four late 13th and early 14th-century castles and their fortified town walls at Harlech, Beaumaris, Conwy and Caernarfon; the second counts six historic slate quarries (some now reimagined with zip wires and caving), vintage railways, mills, ports, and stately homes.
But currently, another significant feature of the landscape is an abundance of “Ar Werth” (for sale) signs stuck in hedgerows, on fencing and on gateposts. In June 2025, the number of homes for sale in Gwynedd was 146 per cent higher than in June 2021, according to Rightmove.
This Area of Outstanding Natural Beauty in Gwynedd county — which stretches beyond the Llŷn Peninsula to Snowdonia and also encompasses Abersoch, known as the Salcombe of the North, complete with yacht club and a bay teeming with jet skis — has the highest estimated number of chargeable second homes in Wales, according to Llywodraeth Cymru (Welsh government).
Like in many parts of the world, from Venice and Lisbon to several areas of Spain, the issues and resentment surrounding second-home ownership have been mounting, and make for a febrile atmosphere. Earlier this year, Spanish Prime Minister Pedro Sánchez mooted a 100 per cent tax bill targeting non-resident, non-EU individuals/companies, particularly those buying second homes for tourism or investment.
But Llywodraeth Cymru began to take action back in 2017, announcing tax reforms. Historically, second-home owners paid a discounted rate of 50 per cent of the residential rate due to their reduced use of council services such as waste collection. The discount was replaced by premiums. Local authorities could increase council tax on empty and second homes by up to 100 per cent on top of the residential rate. In April 2023 the maximum was increased to 300 per cent. In Gwynedd, the premium stands at 150 per cent, on top of the 8 per cent residential rate increase in April this year. Part of a broader strategy to tackle housing in the area, it in many ways represents a watch-and-learn template for local communities around the world.
“We’ve been complaining about second homes since the 1970s but now we’ve figured out what the problem is, we’ve found the solutions, we’ve harassed, harangued and lobbied the government to help us enact them,” says Plaid Cymru councillor Craig ab Iago, the cabinet member for environment and the former cabinet member for housing, who represents Pen-y-groes. He hails the curbs on second homes and holiday lets as “pioneering”.
Martin Lewthwaite, who has worked at Beresford Adams, the estate agency covering Wales and Cheshire, since 1974, opening the Abersoch branch in 1980, estimates around 600 properties are currently for sale across the Llŷn Peninsula (some off-market). “Previous years, we’ve had less than half that,” he says. He’s the opposite of buoyant. “I’ve seen many ups and downs over the years, but this is the most difficult period I have ever experienced.”
The question many are asking is: will the matrix of measures have the desired effect for the people who most need change?
“Cyngor Gwynedd [Gwynedd Council] faces serious housing pressures, with nearly 4,000 people on the social housing register and 956 households presenting as homeless during 2024-25,” says councillor Paul Rowlinson, Cyngor Gwynedd cabinet member for housing and property. Its clear-sighted aim, he says, “is commit[ment] to increasing the supply of affordable homes to meet the housing needs of the people of Gwynedd”.
The Housing Action Plan, launched in 2021, diverts funds raised from the council tax premium on second homes to ensure that more local people have access to affordable homes across Gwynedd.
But premiums are only one measure being introduced. In December 2024, the Welsh government announced that the higher rate of Land Transaction Tax (LTT, previously known as Welsh stamp duty) for second homes will increase by 1 per cent across all bands, approximately 5 per cent above the main residential rates.
This followed the closure of the business-rate “loophole” by increasing the minimum requirements to register a second home as a business: a property is required to be made available to let for at least 252 days of the year and let for at least 182 days — up from 140 and 70, which had been in place since 1 April 2010. If a property is rented out every school holiday (13 weeks) plus every remaining weekend (42 x 2 nights) it would be let for 175 days per year.
“It’s extreme,” says Rebecca Rose, a teacher, who inherited a traditional farmhouse that sleeps nine in Moelfre on Anglesey 18 years ago and rents it out as a holiday cottage through holiday home letting agency Boltholes & Hideaways. Council tax premium on Anglesey stands at 100 per cent on top of the residential rate. Save a few weeks spent there with her children, it is rented all year round to meet the 182-day rental criterion for business rate relief. “If I don’t meet the 182 days, I’d have to pay £9,000,” she says.
Rose’s rental profit has been stagnant at £10,000 annually for many years, due to rising running and maintenance costs. She has adapted her booking strategy to be more flexible to ensure the property meets the 182-day target. “In order to be competitive, I haven’t raised the prices in line with inflation for a very long time,” she says. “In June I had to drop prices in order to fill it.”
In September last year, Cyngor Gwynedd, with support from the Welsh Government, took further action to discourage second-home ownership and bring more of the area’s housing stock back into use as ‘main homes’ by bringing in an Article 4 [AD4] direction, which requires freeholders to seek planning permission to turn a primary home into a holiday let or second home.
Ab Iago refers to council tax premiums, Article 4 and the 182-day minimum for business as “a few blunt tools” with which to shape their community, and which are “better than nothing”. What he would also like to see is the devolution of housing and planning to the local authority. “Our job as council is to think about everybody, not just about specific parts of the community”, which includes “the thousands of people we’ve got on the housing waiting list and the homeless who don’t have any house at all”.
The impact and reactions thus far paint a mixed picture. In 2024-25 Cyngor Gwynedd reported a 295 per cent increase in income raised from second homes since 2018-19 — to £15.7mn. “Since the launch of the Plan, almost 9,000 people have received support through new tenancies, grants, loans and housing advice,” says Rowlinson. “To date, we have invested almost £70mn, including £10.5mn from the council tax premium, which has enabled 800 units to be built, developed or brought back into use.”
Despite this, the number of households currently presenting as homeless, 956, has risen since 2019-20, when the figure was 745 — increasing to 1,126 in 2021-22, before then falling.
Meanwhile, “the council tax situation is forcing people out of the area”, says Lewthwaite, who describes the tax reforms as “punitive”, adding: “Those that have had their houses for many years feel it’s uneconomical to carry on.”
Jack Pollitt, co-founder of Abersoch ice cream parlour Two Islands, worries that long-standing, valued members of the community — even if second-home owners — are being pushed out. “We have heard from customers, some of whom are third generation visitors to the area, that they cannot afford to keep their family homes any longer,” he says, adding that “the tax increase is pushing out some of the lower and middle income visitors to the area”.
While the local market is seeing more houses being offered for sale, fewer sales are being agreed; the number in Gwynedd dropped by 34.3 per cent between 2021 and 2024, according to Knight Frank. And between 2019 and 2024, after the first premiums were introduced, Gwynedd house prices grew 24 per cent, compared with the Welsh average of 31 per cent, says Knight Frank.
The council’s desire to reduce property prices to meet local need is incompatible with Welsh property owners who rely on their asset to appreciate over time, argues Lewthwaite. And even significant price reductions for many second homes are not enough to meet local need.
Research by Cyngor Gwynedd carried out in September 2024 showed that more than 65 per cent of its population was still priced out of the housing market, with the percentage being significantly higher in those areas of the county with a large number of holiday homes. In Abersoch that figure is estimated to be 96 per cent.
The campaign group People of Gwynedd Against Article 4 (PGAA4) argues that the new planning regulations negatively impact the local housing market, devalue properties and make it harder for local residents to find housing. The campaign awaits the outcome of a judicial review in Cardiff on June 23, expected this autumn, which could result in the council’s decision being overturned, or if upheld, it would allow the new regulations to remain in place.
Rhys Elvins, who set up his independent family estate agency in Abersoch in 2005 and is opposed to Gwynedd’s “restrictive” and “draconian” tax reforms, says: “There are plenty of houses for sale at a lower price.” On Rightmove there are currently 68 properties listed for sale on the Llŷn Peninsula for less than £150,000.
The average house price in Gwynedd is £234,388; in Abersoch, many homes cost upwards of £1mn; according to Lewthwaite, property prices are being dropped but not any where near enough to meet the needs of locals.
Take a four-bed new build completed in 2022 with five bathrooms, Tesla energy storage, EV charger and air conditioning. It was marketed by Elvins at the peak of the market late that same year for £3mn. The property did not sell, and has been dropped progressively by more than 40 per cent to £1,695,000, where it has plateaued since August 2024. “We had a buyer interested at £1.7mn as a second home,” says Elvins. “But they said, ‘We might not want to rent it right now, but if we did want to, we can’t, because we need planning permission, and they won’t give it. So, we’re not going to buy it.’ Article 4 is having a direct impact.”
In Barmouth, at the southern tip of Snowdonia, a Grade II-listed Georgian house built in 1820 and set in a 36-acre plot overlooking the Mawddach estuary, features follies, woodland and a private quay. The six-bedroom and five-bathroom property has been progressively reduced by more than 45 per cent from £2,375,000 in May 2024 to £1.3mn in May this year by Express Estate Agency, based in Manchester.
Lewthwaite and Elvins both believe that the majority of Welsh locals wanting to get on the property ladder aren’t first looking for a Tesla charging point, air conditioning or a private quay. More of a priority is access to infrastructure: health services, transport and job opportunities close to their home, some of which are more commonly found in the town of Pwllheli or the city of Bangor, an hour away.
“It’s not a free market any more,” says Elvins, “Residents are limited as to who we can sell to, which has a huge impact on the value of our properties.” Welsh retirees who were banking on selling their primary residence to a second-home buyer to downsize and free up equity to fund retirement are impacted as a direct result of Article 4, he argues.
“The irony is, 40 years ago Abersoch was struggling, with few restaurants and little employment,” says a second-home owner in Bwlchtocyn, near Abersoch, who wishes to remain anonymous. 1985 was the year the miners’ strike ended after a bitter 362-day fight that saw more than 20,000 Welsh miners down tools to prevent closures proposed by the National Coal Board and Margaret Thatcher’s government. By the end of the 1980s, only 3,700 of that number remained. “Planning laws were relaxed and second homes were built to attract holidaymakers into the area to boost the economy. Now they are killing the goose that laid the golden egg.”
Laurence Court of Court’s newsagents, a 60-year-old family business in Abersoch, believes it’s too early to tell: “We won’t feel the full effect immediately. It will take at least a year or two before we really understand the impact on our seasonal business.” Pollitt says he is worried that there will be less younger staff available to work summer jobs at Two Islands because their parents are renting out their homes for more weeks. Lewthwaite, meanwhile, notes that local residents alone would not sustain the same level of employment offered to cleaners, gardeners and building contractors by second-home owners.
But ab Iago doesn’t see current tourism levels in Gwynedd as sustainable. “While tourism is an important economic sector in this area, it doesn’t create lots of long-term, well-paying jobs,” he says. “If we want young people to stay in Gwynedd and to be able to afford to buy property here, we need them to have jobs that are long term and well paid, because this hasn’t, historically, been true for us. While our house prices are equivalent to [other areas in Wales], our wages aren’t even close.”
Welsh property tax reforms are seen by some as another step in the Welsh versus English culture war. Of those using a second address as a holiday home in Wales, 74.1 per cent are from England, according to government statistics. Preserving local culture and communities is a priority for Llywodraeth Cymru with ambitions to increase the use of Cymraeg (the Welsh language) and reach a million Welsh speakers by 2050.
Properties marketed only to Welsh speakers have ignited controversy. In the Gwynedd village of Botwnnog, the community council called for a development of 18 homes to be reserved for Welsh speakers, because an influx of English speakers could be a “degenerative influence”. However, a report from Llywodraeth Cymru suggests a generational divide of opinion about the impact of second homes on their sense of community, the Welsh language and the affordability of housing. The majority of 18 to 35-year-old respondents expressed that second homes and holiday lets have an overall negative impact on their area while those aged over 36 felt that second homes had a positive impact.
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At the same time, the government is struggling to meet housebuilding targets, says Iain Mansfield, chief financial officer at Principality Building Society. “Despite the Welsh government’s long-standing target to build 20,000 new homes by 2026 to ease housing constraints, current levels of supply are falling short.” According to government statistics, 8,933 affordable housing units have been delivered across Wales since the commitment in 2021 with an estimated 3,660 planned for 2024-2025.
The prospect of the 300 per cent premium still looms over second-home owners in Gwynedd. Discussions will start among councillors over the next few weeks around any potential changes to the premiums for the next financial year. Cyngor Gwynedd’s full council is expected to decide on the council tax premium levels for 2026-27 at its meeting on December 4.
The idea of Gwynedd as a template for other places facing similar housing issues is welcomed by ab Iago, who remains hopeful that his three children will come to think of the area as a pioneering place that provides hope and comes up with solutions. He says: “Lots of councils in England and Wales are looking at us and waiting to see what happens.” He also cites recent interviews with journalists from Holland and Turkey. “In the end, everyone will see that we’re trying to build an environmentally, economically and socially sustainable tourism sector in Gwynedd. Give it 10 years, and I think we’ll be living in a different scenario.”
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