Key figures have demanded government action on holiday lets after it emerged that the number of second homes in London grew during the course of the pandemic.
Information gathered by campaign body Generation Rent showed that councils in the capital had registered more places as furnished but non-primary residences in October 2022 than in the same month in 2019.
This is despite travel restrictions that subdued overseas demand for short-term lets and a race for space that lessened domestic interest in London property.
Southwark’s tally of second homes soared from 523 before Covid hit to 2,951 last autumn. In Hammersmith and Fulham, the total grew by 38 per cent in three years to 2,688. Enfield’s stock of non-primary residences jumped by more than half to 1,691.
Top 5 boroughs for second home growth
London borough |
Second homes in Oct 2019 |
Second homes in Oct 2022 |
Increase |
Southwark |
523 |
2,951 |
2,428 |
Hammersmith and Fulham |
1,946 |
2,688 |
742 |
Enfield |
1,097 |
1,691 |
594 |
Greenwich |
302 |
786 |
484 |
Croydon |
408 |
707 |
299 |
Source: Generation Rent analysis of council tax figures
Although some boroughs saw drastic drops in second home ownership over the same period — there were 1,076 fewer in Kensington and Chelsea and a similar fall in Barnet — London’s total number of second homes edged up half a per cent to stand at 46,158 last October.
Dan Wilson Craw, acting director of Generation Rent, warned that the rise recorded even during the worst of the pandemic highlighted a looming threat to resident tenants.
“The unregulated and undertaxed holiday let sector is out of control,” said Mr Wilson Craw. “A large part of the solution to high rents is more housebuilding, but locals won’t see the benefits of this if houses continue to leak into the holiday homes sector.”
The tiny proportion of second homes officially registered by boroughs as holiday lets – just 0.3 per cent of the total in 2022 – also showed how ineffective regulation of the sector was, Mr Wilson Craw claimed.
Many landlords used second home status rather than classifying their properties as short-term lets in order to pay council tax rather than more expensive business rates, he alleged.
Just 122 properties were registered for short-term let in London, Generation Rent found. To be recorded by HMRC in this way, homes must be available to holiday-makers for at least 210 days a year and actually let for at least half of those.
Meanwhile short-term lets such as those advertised through Air Bnb can legally only be let for up to 90 days a year before the owner is required to apply for planning permission. These are more likely to fall into the second-home category.
More than 8,000 entire homes in the capital have been “recently and frequently” booked through Air Bnb alone, according to data site Inside Airbnb.
’Legislation has failed’
“It is so lucrative in central London, there is a big short-term let market,” said Mr Wilson Craw. “It is an aspect that is of concern as homes rented to tourists are lost to the supply available to local people.”
He called for greater regulation of second home use: “It has been so difficult for boroughs to enforce planning rules,” he said. “We need a licensing scheme that would stop the inflating of property values, and involve a regular fee which would help fund enforcement.”
Sadiq Khan echoed this call. A spokesperson for the mayor said: “London boroughs are losing tens of thousands of homes to short-term let use each year, worsening London’s acute lack of housing supply. Legislation attempting to restrict homeowners to a 90-night limit on short-term lets in London has failed due to a lack of enforcement.
“The mayor is concerned that the planning reforms being proposed by the government will not effectively protect homes from use as short-term lets and believes a mandatory register is an important step forward.
“To safeguard the supply of permanent homes, the mayor proposes a licensing scheme that allows local government to control the total number of homes used as short-term lets.”
“Broken system”
Southwark Council leader Kieron Williams said efforts to crack down on empty homes in the borough were being “thwarted by a broken national system”.
“Current law is nowhere near robust enough to stop people using their ‘second home’ as a short-term let or Air Bnb,” he said. “This shady game-playing has real life consequences with one in every 23 children in London homeless.
“We’ve already clamped down on this in our 37,000 Southwark council homes, but the government must untie our hands so we can go further to ensure homes are used for local families, not jetsetters.
“What we need is a national register where short-term lets are declared with greater powers for us to charge higher council tax on second homes. If the government is as serious about levelling up as they say they are, there can’t be any further delays with their Levelling Up and Regeneration Bill which would allow councils to apply a council tax premium of up to 100 per cent on second homes.”
A Government spokesperson said: “We are investing £11.5 billion to build the affordable, quality homes this country needs. This includes £4 billion to the Greater London Authority directly in order to unlock more affordable housing in London.
“We are aware of concerns around short-term lets, and we are currently considering responses to a consultation on measures that would give councils more control over the number of new short-term lets and help them to meet local housing needs.
“The Levelling Up and Regeneration Bill will allow councils to apply a council tax premium of up to an additional 100 per cent on second homes. The premium will provide local leaders with additional flexibility to help address the impacts of second homes and improve the sustainability of local services where appropriate.”
Airbnb said the claims in the report were “misleading”. A spokesperson for the short let company said: “ local authorities - not HMRC - oversee planning permissions for short-term rentals.
“The typical listing in London is rented for just 43 nights — far less than the 90 night limit — and four in 10 say the additional income helps them afford their homes and rising living costs.
2Airbnb takes housing concerns seriously, which is why we have enforced restrictions on short-term rentals for more than five years. We welcome regulation and we put forward proposals for a UK Host register in 2021, which are already subject to government consultation.”
