Cumbrian MP Tim Farron's amendment to the Levelling Up and Regeneration Bill to give councils new powers to restrict second homes was defeated.
The amendment was voted down by Conservative MPs by 321 votes to 172.
However, the Government said they would introduce a consultation on changing planning use for short-term lets which could let local councils set a limit on the number of holiday lets and Airbnbs in their area.
In response to Mr Farron, the Housing Minister Lucy Frazer said: "I am grateful to the honourable Gentleman for speaking on this issue and indeed other issues on this topic.
"We are committing to consulting on a change to the Town and Country Planning (Use Classes) Order 1987 to enable local areas to better control changes of use to short-term lets, change to the Town and Country Planning (Use Classes) Order 1987 to enable local areas to better control changes of use to short-term lets, if they wish.
"We propose to consult early in the new year.
"Following that consultation, we hope to bring in some legislation, if that is the result of the consultation."
Speaking afterwards, Mr Farron said: "Conservative MPs continue to have their fingers in their ears when it comes to the issue of communities being turned into ghost towns due to excessive second home ownership.
"However I’m glad to see finally some movement from the Government on changing planning law to restrict the worrying trend of people being evicted from their home so their landlord can make a bigger profit by putting their property on Airbnb.
"I'm massively grateful to everyone who has helped me campaign on this issue. While progress has often felt painfully slow, I'm glad ministers now look like they are prepared to act.
"I’ll keep on pushing until we get the change we need to save our communities.”
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