Holiday let owners in England face planning permission controls

UK: Holiday home owners in England are facing up to a potential requirement to obtain planning permission to rent out their properties under new UK Government proposals to protect affordable housing in areas with higher numbers of rental listings.

Under fresh plans laid out by Michael Gove, Secretary of State for Levelling Up, Housing and Communities, local councils will have the ability to block listings of homes on short-term rental platforms, adding that residents were being “pushed out of cherished towns, cities and villages by huge numbers of short-term lets”.

A series of tax squeezes, including a reduction on the Capital Gains Tax allowance, are also being introduced across the country, making it harder for second homeowners to list and rent out their properties particularly in popular tourism hotspots where pressures on residential housing supply are becoming more pronounced.

The plans are expected to come into effect later this year although the exact nature of what they entail are still to be fully decided. According to Mr Gove’s department, a consultation period is currently taking place on whether homeowners will be allowed to rent out the home they live in for 30, 60 or 90 nights a year before planning permission for a change of use becomes necessary.

Last month, Mr Gove pledged to bring forward short-term let restrictions in the UK as part of the government’s flagship Levelling Up and Regeneration Bill, suggesting that the proliferation of holiday lets and Airbnb listings was  “impeding” the capacity of young workers to live and find jobs close to home, thereby preventing them from contributing to the local economy.

Prior to that in December, he put forward a proposal containing a set of concessions to around 60 backbench Conservative MPs who were putting pressure on the government to abolish mandatory, new-build housing targets of up to 300,000 new homes a year in the UK by the “mid-2020s”.

There is currently no mandate for planning permission on short-term lets in England outside of Greater London, where there is a 90-day limit on how long property owners can let their home out before they have to apply for a change of use.

The rules that are set to be introduced in England may not be strictly compulsory but local authorities will have the option of deciding whether they wish to use their new powers for planning controls.

Following the UK Government’s announcement of a 12-week review into the impact of holiday lets on popular tourism destinations in England last summer, the Department for Culture, Media and Sport is on the verge of launching another consultation on a prospective registration scheme for short-term lets.

Culture Secretary Lucy Frazer told The Telegraph: “This new world of ultra-flexible short term gives tourists more choice than ever before, but it should not come at the expense of local people being able to own their own home and stay local.

“The government wants to help areas get the balance right, and today we have an incomplete picture of the size and spread of our short term lets market. This consultation on a national registration scheme will give us the data we need to assess the position and enable us to address the concerns communities face,” she added.

It follows a series of protests by local residents in popular tourist destinations across England against the perceived issue of “overtourism” caused by an influx of tourists and the growth of the holiday let market. This has been most noticeable in places such as St Ives in Cornwall and Scarborough and Whitby in North Yorkshire – the latter saw residents vote to ban new houses as second homes in the seaside town last June.

UKHospitality argued that the short-term lets registration scheme must be mandatory to “drive real change and level the accommodation playing field”.

UKHospitality chief executive Kate Nicholls said: “Many businesses across the short-term letting market are not operating to the same legal standards as hotels, and a mandatory scheme is desperately needed to bring them up to scratch. UKHospitality has long been arguing that a registration scheme for short-term lets is essential to ensure parity across accommodation in the UK and I’m delighted that government is taking action in England.

“Consumers deserve to know that wherever they stay, they will be experiencing the high standards of health and safety, fire safety and accessibility that they rightly expect.

“For that reason, the government needs to ensure this scheme delivers change and both registration and inspections must be mandatory. An opt-in scheme will simply provide a loophole that will allow short-term lets to continue to fall well below the high standards that have been set by hotels for decades,” she added.

On the other hand, tourism leaders and landlord groups warned that “the burden of planning permission” would have a detrimental effect on the future of an industry that continues to generate income for local economies and drive fresh revenue streams for hosts.

Andy Fenner, CEO of the Short Term Accommodation Association [STAA], said: “We support a registration scheme but introducing a planning permission requirement completely ignores the contribution short-term rentals make to the economy. Many thousands of small businesses will be affected by these changes if the Government sees them through.

“It’s important this issue doesn’t become a political football when the short-term rental sector is a key reason why the UK is so attractive to international and domestic tourists. Its role in providing local employment is routinely overlooked and measures to solve housing shortages should instead be focused on building new homes in sufficient numbers.

“We’ve seen similar measures introduced in Edinburgh but the effect was a damaging reduction in short-term rental availability, with many forced to exit the market. We need the government to get round the table and identify an alternative way forward that doesn’t do as much harm to the tourist industry and local jobs,” he added.

Theo Lomas, head of public policy and government relations for Northern Europe at Airbnb, said: “Airbnb has long called for a national register for short-term lets and we welcome the government taking this forward. We know that registers are clear and simple for everyday hosts to follow while giving authorities the information they need to regulate effectively.

“The vast majority of UK hosts share one home, and almost four in 10 say the earnings help them afford the rising cost of living. We want to work with the government to ensure that any planning interventions are carefully considered, evidence-based, and strike a balance between protecting housing and supporting everyday families who let their space to help afford their home and keep pace with rising living costs,” he added.

Airbnb said that it welcomes the UK Government’s decision to introduce a registration scheme for short-term lets in England, while proposing that the government issues new planning guidance distinguishing between commercial short-term letting activity and non-commercial / amateur short-term letting activity, on the basis of proportionality of activity.