UK Government launches official short-term rental market review

UK: The UK Government has announced the launch of a 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.

The proposed scheme, which aims to improve the holiday letting market for those living in tourism hotspots, could involve physical checks of premises to ensure regulations in areas including health and safety, noise and anti-social behaviour are obeyed.

An open call for evidence, lasting for 12 weeks, has been set up to understand how the rise in use of rental booking websites and apps is having an impact on local communities.

Airbnb listing data showed a 33 per cent increase in UK listings between 2017 and 2018, from 168,000 to 223,000 listings.

Further measures that the government is considering include a registration ‘kitemark’ scheme with spot checks for compliance with rules on issues such as gas safety, a self-certification scheme for hosts to register with before they can operate, and better information or a single source of guidance setting out the legal requirements for providers.

Tourism Minister Nigel Huddleston, a speaker at the recent Short Stay Summit at Tobacco Dock in London, said: “We’ve seen huge growth in the range of holiday accommodation available over the last few years. We want to reap the benefits of the boom in short-term holiday lets while protecting community interests and making sure England has high-quality tourist accommodation.

“While no decisions have been taken, this review will help us work out the options to look at so we can protect our much-loved communities and thriving holiday industry,” he added.

Housing Minister Stuart Andrew said: “Holiday let sites like Airbnb have helped boost tourism across the country, but we need to make sure this doesn’t drive residents out of their communities. We are already taking action to tackle the issue of second and empty homes in some areas by empowering councils to charge up to double the rate of council tax.

“This review will give us a better understanding of how short-term lets are affecting housing supply locally to make sure the tourism sector works for both residents and visitors alike,” he added.

Although the government acknowledged the benefits of the short-term letting, ranging from an increase in the variety and availability of options to the means of allowing people to make money from renting out spare rooms and properties, it said that it was an acting on the fears of local communities where housing supply can be limited and property prices are being driven up, as well as concerns over a rise in anti-social behaviour, including noise, waste and drunken behaviour. Furthermore, the government wants to guarantee higher protections for guests when there are concerns over negligence of health and safety regulations.

The review will also consider the operation of the provisions in London under the Deregulation Act 2015 to allow for measures to be taken against anti-social behaviour, whilst enabling Londoners to rent out their homes.

David Weston, chairman of the Bed & Breakfast Association, the UK trade association for owners of B&Bs, guesthouses and small family-run hotels, said: “We are pleased that the government is launching this call for evidence. It is the right time to consider how we protect all consumers, regardless of an accommodation owner’s business model, and level the playing field between traditional business and those on newer platforms.

“The call for evidence will help the government strike the right balance between achieving those aims, yet avoiding imposing disproportionate new burdens or costs on small businesses.

“We will be playing a constructive role in helping the government develop a proportionate solution, and we call on all tourism accommodation owners to take part in the call for evidence, and ensure your views are heard,” he added.

Merilee Karr, chairperson, UK Short Term Accommodation Association [STAA], and founder and CEO, Under The Doormat, said: “The STAA is pleased to be able to contribute to the call for evidence on short-term lets and holiday accommodation in England, announced today by DCMS [Department for Digital, Culture, Media and Sport]. Short-term and holiday rentals play an increasingly important role in the English tourism economy by contributing significant numbers of jobs in local communities and generating valuable sources of income for local homeowners and businesses.

“Any new regulatory solution should recognise this contribution and seek to support the industry as an important part of the wider UK tourism sector. As an industry we look forward to working with DCMS to ensure that a simple, cost-effective regulatory solution is found, which takes into account the needs and benefits to communities, and supports owners to rent out properties that would otherwise sit empty.

“We are glad to hear that the UK Government is committed to a solution which gets the balance right, and we look forward to sharing our insights and thoughts on practical solutions with policymakers,” she added.

The launch of the consultation period is part of a commitment made by the government in June 2021 with the publication of its Tourism Recovery Plan in the midst of the Covid-19 pandemic. It is now set to crack down on second homeowners renting out their second properties on rental platforms, having already sought to close tax loopholes and introduce higher stamp duty.

In recent months, the devolved administrations across Scotland, Northern Ireland and Wales have set out legislation or stated their ambitions to establish a licensing scheme through their national tourist boards.

Across Europe, anyone wishing to advertise and provide guest accommodation in Portugal must now register electronically before doing so, while Greece and parts of Ireland are strengthening their requirements for hosts to rent out their homes on a short-term basis.

In the meantime, Airbnb has reiterated its commitment to tighter regulation of the sector and antisocial behaviour, and says that it welcomes proposals for a host registration system in the wake of a number of serious incidents at properties. Earlier this week,  the home-sharing platform announced a permanent ban on parties and unauthorised gatherings at its listings.

The government is calling on all parties, including hosts, online platforms, accommodation businesses and local authorities, to submit their views as evidence to inform any future steps for the sector.