:
UK: The regulation of short-term lets was the subject of a Westminster Hall debate on Thursday [12 September], ahead of the introduction of either a potential statutory registration or licensing scheme, and a bill on the licensing of short-term lets in parliament.
It came after the previous UK Conservative government announced reforms to planning laws in February that would empower councils in England to make short-term lets in their area subject to a planning process, thus preventing a “hollowing out” of communities. A consultation on a new use class for short-term lets also took place to seek views on proposed planning changes to use classes and permitted development rights as a step to help local areas manage the proliferation of short-term lets and support sustainable communities.
The new Labour government will abolish the furnished holiday lettings [FHL] tax regime from April next year, as was previously announced under the Conservative government, removing the tax advantages that landlords who offer short-term holiday lets have over those who provide standard residential properties.
The Westminster Hall debate was led and opened by Rachel Blake MP [Minister], Cities of London and Westminster, who called for further regulation of short-term lets, especially through planning measures. Blake voiced her support for a registration scheme but was critical of previous proposals to impose a new planning-use class and associated permitted development rights for short-term lets, while calling for the future regulation of the sector through planning measures.
Rachael Maskell, MP for York Central was selected from the ballot to lodge a Private Members’ Bill, which she said would be used to introduce a bill on the licensing of short term lets. The Private Members’ Bills are set to be presented to the House of Commons for a first reading on Wednesday 16 October, when more clarity will be given on the future of short-term letting regulation.
Maskell previously introduced a similar Short-term and Holiday-let Accommodation [Licensing] Bill in 2022, however it never proceeded beyond a first reading.
In this latest debate, she added her support for a full licensing scheme and said that her draft Bill would not only bring in licensing, but also permit local authorities to remove licences if anti-social behaviour happens in short-term lets.
Other notable contributions included:
Richard Foord MP, Honiton and Sidmouth, spoke about the dangers of applying some of the problems in urban settings to rural areas, and called traditional holiday lets “excellent”.
Lizzie Collinge MP, Morecambe and Lunesdale, said that short-term lets play an important role in supporting local businesses, but that rapid growth is causing unintended and harmful consequences, with properties taken out of long-term use. She confirmed her support for a licensing system that is “fair”.
Polly Billington MP, East Thanet, called for further regulation of short-term lets, highlighting so-called “party flats” as a reason to introduce more stringent measures. Billington said that a package of measures should be introduced alongside local authorities, and not imposed without a partnership from above.
Helena Dollimore MP, Hastings and Rye, said that it was important to get the balance right between the contribution to tourism and the need for housing.
Joe Powell MP, Kensington and Bayswater, was also in favour of further regulation via licensing scheme. Powell said that the current 90-day rule in London was unenforceable because of multiple platforms and under-resourced local authorities.
Jayne Kirkham MP, Truro and Falmouth, spoke about a “toolkit” which could be part of the devolution package to be announced. She favoured a registration scheme, a new planning use class, the closure of a council tax / business rate ‘loophole’, and a further increase in council tax on empty second homes.
Markus Campbell-Savours MP, Penrith and Solway, who was in favour of a licensing scheme, said that some tourism economies were dependent on short-term letting, and asked how it would be possible to remove the harm done from short-term lets without harming the local and wider tourism economy.
Andrew George MP, St Ives, noted that everyone had been “heavily lobbied” by those concerned with the FHL tax regime changes, but raised concerns about evictions taking place in the sector to create more short-term lets. As another MP supporting a registration scheme and a new planning-use class, he called for a distinction between properties with planning permission for short-term letting and those which are used for permanent occupancy, while calling for the Minister to make representations to the Treasury to prevent short-term lets “abusing” the non-domestic rates system.
Joshua Reynolds MP, Maidenhead, said that the “uncontrolled” growth of holiday lets in rural areas had been undermining local services. He called for a new planning-use class and more powers for local authorities to regulate short-term lets, such as increasing council tax and introducing an overseas stamp duty surcharge, as well as driving a six-month moratorium on residential properties becoming short-term lets if the tenant were to be evicted on a no-fault basis.
David Simmonds MP, Ruislip, Northwood and Pinner, urged the government to consider the use classes relevant to properties and to ensure local authorities have powers in the planning system to oversee enforcement.
Responding on behalf of the government, Parliamentary Under-Secretary of State for Building Safety and Homeless, Rushanara Ali, said that the points raised in the debate had highlighted the wider issues of housing availability and affordability. The Minister acknowledged that short-term lets had caused concerns for local people, including the hollowing-out of local communities.
In reaction, Ali said that the response needed to be proportionate to avoid unintended consequences, and that the government needed to take stock of the existing policies and proposals before deciding on how to move forward, which will be aided by data provided by the introduction of the registration scheme.
In closing the debate, Blake welcomed the impending introduction of the registration scheme and called for more thought to be directed towards a licensing scheme. She said that she could foresee an opportunity in the English Devolution Bill and the reworking of the National Planning Policy Framework for licensing to be introduced for short-term lets.
The Local Government Association [LGA], the national membership body for local authorities working on behalf of our member councils to support, promote and improve local government, which has raised its concerns about the impact of “unregulated” growth in the holiday let sector, said that it welcomed continuing progress on the development of a registration scheme for short-term lets, while voicing its concerns over the status and progress on accompanying changes to planning regulation. It suggested that the original plan to allow automatic transition of planning use class would result in “a very significant amount of housing being lost permanently to short-term lets, and unavailable for local residents”.
Following the national consultation on a registration scheme for short-term lets in England in June 2023, the LGA called for a review point to determine whether a licensing or registration scheme would be most “appropriate”, saying that a registration scheme would introduce “no new regulatory powers to take action against ‘bad actors’ in the sector”.
It said that for a registration scheme to be effective, registration should last as long as the premises is used as a short-term let with an annual fee to maintain the listing, it must be introduced alongside the proposed planning use class [with built-in data collection and evaluation to address potential loopholes or unintended consequences], and a full assessment of the scheme’s impact on council regulatory teams is required, and homeowners renting out individual bedrooms should be excluded from the requirement to be registered if they can be let independently.
The LGA added that a registration scheme would “enhance access to local, affordable housing supply for people with protected characteristics, who are more likely to face homelessness, by improving local authority management of housing supply”, while ensuring “minimum accommodation standards, offering protection for those who may struggle to assess quality”.
Meanwhile, Alistair Handyside MBE, executive chair, The Professional Association of Self-Caterers UK [PASC UK], said: “For the last seven years, PASC UK has been calling for a statutory registration scheme, where proof of safe and legal compliance is provided in order to advertise and take payment for stays. This would provide real data on the sector and discourage bad actors.
“This is the journey to a fairer holiday let sector. What the fragile rural and coastal visitor economies can’t afford are aggressive policy interventions such as licensing and stealth taxes. These would have immediate and dramatic impacts for businesses, including pubs, restaurants and visitor attractions that rely on the guests that the sector provides the bedstock for.
“We hope the Minister was listening to that argument today, and will reflect on the real value traditional holiday lets bring to rural and coastal communities,” he added.
The debate transcript can be read in full here.
