New rules for short-term holiday lets in England were unveiled by the government on Monday, with the aim of reining in a sector that campaigners claim is “out of control”.
Amid growing concern about an explosion in the number of properties being let out on a short-term basis, leading to local residents being pushed out of their communities, ministers are proposing to introduce a registration scheme for holiday lets, and will also require them to get planning permission.
However, many campaigners say the planned changes do not go nearly far enough.
So what’s the problem?
In recent years there has been a dramatic increase in the number of people turning their properties into holiday rentals and short-term lets. A lot of this has been fuelled by the ubiquity of platforms such as Airbnb and Booking.com that arguably make it easy to do this as a potentially lucrative and often largely unregulated side hustle.
The coronavirus pandemic then turbo-charged this trend because it triggered a boom in domestic holidays and short breaks – something that has continued during the cost of living crisis.
At the same time a less favourable tax regime for buy-to-let following changes made in 2015 has meant many landlords and investors have left that sector and switched to catering to tourists – particularly in popular destinations such as the Lake District and Cornwall.
The result of all this, said campaign group Generation Rent, was that “families are being driven out of their communities by the disastrous loss of homes into holiday lets, with over 35,000 privately rented homes lost to Airbnb-style short-term lets since 2019”.
Registered holiday lets and second homes have an arguably negligible effect on housing supply across England, accounting for 26,000 properties compared with the 682,000 new homes added to the nation’s housing stock over 2019-22. However, the effect they do have is highly concentrated: 80% of the recent growth in holiday homes has happened in 25 local council areas.
There is also the issue of antisocial behaviour linked to short-term lets, such as fly-tipping, bags of rubbish and noisy parties.
What has the government announced?
It has acknowledged there is a problem. The housing secretary, Michael Gove, said on Monday that in some areas “too many local families and young people feel they are being shut out of the housing market and denied the opportunity to rent or buy in their own community”.
It has been consulting on this issue and has now announced a shake-up of the rules in England.
There are two main proposals. Planning permission will be required for future short-term lets, which the government argues will give councils more power to “control” them. The proposed changes would create a planning “use class” for short-term lets that are not used as a sole or main home.
Meanwhile, a mandatory national register will be set up to provide local authorities with information on short-term lets in their area and, in theory, enable them to monitor their use, the impact on the local area and whether health and safety rules are being met.
More detailed information will be set out by ministers in the coming months, and the government said the reforms would be introduced “from this summer”.
I sense a ‘but’ …
So yes, while many commentators were happy to see the government taking action, some pointed out omissions or what they argued were sizeable flaws in the shake-up.
The “future short-term lets” aspect of the first proposal is important: the government said existing short-term lets “will automatically be reclassified into the new use class and will not require a planning application”. Generation Rent said that allowing existing holiday lets to automatically gain permission to continue “risks shutting the stable door once the horse has bolted” and would do nothing about the thousands of homes that had already been lost.
Meanwhile, ministers said homeowners would still be able to let out their own home for up to 90 nights a year without planning permission. The government had been looking at whether there should be a limit of 30, 60 or 90 nights a year.
On top of this, the government also said it was looking at how to ensure the register “does not apply disproportionate regulation – for example on property owners that let out their home infrequently”.
The fact that the government announcement included a positive quote from Airbnb welcoming the register as “good news for everyone” was seized on by some commentators, with Jonathan Eley of the Financial Times posting on X that it “tells you everything you need to know about the pointlessness of the legislation”.
Aren’t some areas already cracking down on holiday lets?
Yes. In Scotland, for example, new rules took effect on 1 October last year. There, people must have a licence before they offer short-term lets, and operating without one is a criminal offence: you could get a fine of £2,500 and be banned from applying for a licence for a year. The rules apply even if someone occasionally lets out their spare room or sublets their property while on holiday.
What do campaigners say needs to be done?
Groups such as Generation Rent say the government should rethink its approach and give councils the power to require holiday lets to join a licensing scheme.
It has also called for the introduction of local caps on the number of holiday lets that can operate in an area – particularly those locations with especially serious housing affordability problems.
There is already precedent for a national licensing regime. A fairly strict one is in place for larger private rented homes – large houses in multiple occupation – in England and Wales.
