House prices in Gwynedd have plummeted by more than 12% in a year, following a series of aggressive measures introduced by the local council to curb the proliferation of second homes and holiday lets.

According to data from the Principality Building Society, the drop is the steepest recorded in Wales, significantly outpacing the largely stable market elsewhere in the country, where the average house price stands at £233,194.

Gwynedd Council has implemented a range of policies aimed at reducing the number of second homes, including a 150% council tax premium on such properties. In addition, the authority has invoked Article 4 Direction powers, requiring homeowners to seek planning permission before converting residential properties into second homes or short-term holiday rentals.

The council argues that these measures are necessary to address a growing housing crisis for local residents. “We want to ensure that local people can access suitable and affordable housing,” a council spokesperson stated. “Unfortunately, research shows that many residents are priced out of the market, particularly in areas with a high concentration of holiday homes.”

The impact of these policies is already being felt in the local housing market. North Wales estate agent Dafydd Hardy described conditions in Gwynedd as “mixed,” noting that the crackdown on second homes has led to an increase in properties being put up for sale.

Gwynedd was the first local authority in Wales to use the new planning powers granted by the Welsh Government in 2023. These powers allow councils to regulate the number of second homes and Airbnb-style lets by introducing three distinct property classifications: main home, second home, and short-term accommodation. Local authorities can now require planning permission for changes between these categories, a move designed to help control the housing supply and affordability for local residents.

While supporters argue the measures will alleviate pressure on the housing market, critics warn that they could deter investment and weaken the local economy, which relies heavily on tourism. However, the council remains resolute in its stance, emphasizing that controlling the number of second homes is key to “securing the future of our communities.”

As the housing market in Gwynedd continues to adjust, the long-term effects of these policies remain to be seen. For now, the sharp decline in property prices signals a major shift in one of Wales’ most contentious housing battlegrounds.