England
Ellesmere Port in Whitby [Credit: Anna Cicicic on Unsplash]

Government announces short-term let controls in England

UK: The UK Government has announced reforms to planning laws that will empower councils in England to make short-term lets in their area subject to a planning process, thus preventing a “hollowing out” of communities.

The reforms will grant local councils more powers to control the proliferation of short-term lets in areas where high numbers of listings are said to be preventing local people from finding housing that they can afford to buy or rent.

As such, the government says that the changes, which are part of a longer-term housing plan, will “protect local residents from being pushed out of their communities by excessive short-term lets”, as well as “address anti-social behaviour and ensure local people can continue to live in the place they call home”.

Meanwhile, a new mandatory national register will be brought in, giving local authorities the information they need about short-term lets in their area. This will help councils understand the extent of short-term lets in their area, the effects on their communities, and underpin compliance with key health and safety regulations.

The proposed planning changes would see a new planning ‘use class’ created for short-term lets that are not used as a sole or primary residence. Existing dedicated short-term lets will automatically be reclassified into the new use class and will not require a planning application.

The government also said that it intends to introduce associated permitted development rights – one allowing for a property to be changed from a short-term let to a standard residential dwelling, and a second that would allow a property to be changed to a short-term let. Local authorities would be able to remove the permissions and require full planning permission if they deem it necessary.

Both measures are solely focused on short-term lets, therefore the planning changes and the new national register will not apply to hotels, hostels or B&Bs, according to the government.

As part of its housing plan, the government wants to “unlock” more homes in England and meet a target to deliver one million homes, set out by Michael Gove, Secretary of State for Levelling Up Housing and Communities. The plan is said to be backed by a £10 billion parliamentary investment.

Gove said: “Short-term lets can play an important role in the UK’s flourishing tourism economy, providing great, easily-accessible accommodation in some of the most beautiful parts of our country. But 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.

“So the Government is taking action as part of its long-term plan for housing. That means delivering more of the right homes in the right places, and giving communities the power to decide.

“This will allow local communities to take back control and strike the right balance between protecting the visitor economy and ensuring local people get the homes they need,” he added.

The government said that it recognised how short-term lets are a significant part of the UK’s visitor economy, and that homeowners will still be able to let out their primary or sole home for up to 90 nights throughout a year without planning permission, as is already the case in London. However, it is still considering how to apply the register so that it does not apply “disproportionate” regulation on people such as property owners who only let out their home on an infrequent basis.

Tourism Minister Julia Lopez said: “Short-term lets provide flexibility for homeowners and give tourists more accommodation options than ever before, but this should not prevent local people from being able to buy or rent homes in their area. The government is committed to getting the balance right to ensure both local people and our visitor economy can thrive.”

Gove previously pledged to bring forward such restrictions across the UK last March as part of a flagship Levelling Up and Regeneration Bill, while claiming that short-term let listings were “impeding” the capacity of young workers to live and find jobs closer to home and that the growth had contributed to the “collapse” of the long-term private rented sector.

In the summer of 2022, the government held a 12-week review into the impact of short-term holiday lets on popular tourism destinations in England to better understand the opportunities and challenges presented for consumers and tourism communities. Since then, a new licensing scheme for short-term let hosts has come into effect in Scotland, while the Welsh Government has announced plans to introduce a statutory registration scheme for all visitor accommodation in Wales.

In a statement, Airbnb said that it welcomed the government’s announcement and that it “recognises there are historic housing challenges facing some communities in the UK”.

Amanda Cupples, general manager for Northern Europe at Airbnb, said: “The introduction of a short-term lets register is good news for everyone. Families who host on Airbnb will benefit from clear rules that support their activity, and local authorities will get access to the information they need to assess and manage housing impacts and keep communities healthy, where necessary.

“We have long led calls for the introduction of a host register and we look forward to working together to make it a success,” she added.

However, the UK Short Term Accommodation Association [STAA] CEO Andy Fenner said that he was “disappointed” that the national registration scheme in England “completely fails to address the challenges the country is facing”.

Fenner said: “The registration scheme could have been game changing for tourism in England had it covered all types of accommodation but, instead, what we’ve got is a missed opportunity that’s a half-way house at best.

“Had it been that comprehensive, politicians up and down the country would have been able to make well-informed decisions on planning. They’d have been able to see exactly how the tourist industry functioned in their local area, which is important because a one-size-fits-all approach that achieves the right balance in one place would crush the tourism in another.

“Instead, the holiday let industry is doomed to continue being unfairly regarded as tourism’s problem child, second-best to hotels, and unjustly taking the brunt of the blame game surrounding housing supply and affordability, despite the lack of a proper evidence base. The presumption is that, if you shut down all short-term rentals tomorrow, the housing crisis would be solved but that is naive in the extreme.

“The holiday let industry is not responsible for the housing crisis. Its causes run far deeper than that and are centred mainly on a lack of housebuilding and the abandoning of housing targets.

“Short-term lets are the modern, dynamic face of the tourism industry and we can’t force people into B&Bs and hotels through legislation. If we did, UK tourism would suffer as people voted with their feet and went elsewhere. The world has moved on, and many tourists don’t want to settle for that any more.

“Restrictions in the number of short-term rentals need to be measured against other important factors, such as employment, housing supply, housing need, and changes in the stock of other tourist accommodation. We will continue to call for a comprehensive registration scheme that includes all types of accommodation.

“Without this, the new powers councils are winning, which will allow them to rein in holiday lets using an effective veto on permitted development rights, will be prone to misuse and political posturing rather than a desire to do what is in the best interests of local communities,” he added.

At the same time, a coalition of rural and coastal community businesses has expressed deep concern over the introduction of a new planning use class for short-term lets in England. The Great British Holidays Campaign – a coalition of major tourism bodies and holiday cottage letting operators – welcomed the introduction of a statutory registration scheme to gather data on the sector and introduce a level playing field for all operators, but urged the government to wait until “robust” data is available before considering harsher intervention in the sector.

The campaign also warned that implementing the planning proposals in their current form would greatly harm the traditional rural and coastal holiday cottages sector which contributes £6 billion to the English economy, costing a forecast 70,000 jobs in already hard-pressed rural and coastal communities.

Alistair Handyside, executive chairman of the Professional Association of Self Caterers UK [PASC UK] – a leading member of the Great British Holidays campaign – said: “We welcome the introduction of a statutory registration scheme that will hold the whole sector to the high standards that many already adhere to. Indeed, this is something Great British Holidays has been campaigning hard for.

“However, the government’s plans for the introduction of a new planning use class will not solve the housing crisis and will damage the wider legitimate short-term letting sector. It will put housekeeping and maintenance workers out of work, and deal a further blow to local pubs, restaurants and visitor attractions at a time when they are already struggling to make ends meet,” he added.

Further details of the planned measures will be set out in the UK Government’s response to consultations, including the timeline for implementation of the register, the use class and the individual permitted development rights – with the changes being introduced in England from this summer.

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