The UK Government has launched a consultation on proposed changes to regulations concerning short-term lets in England.
The Department for Levelling Up, Housing and Communities is running it and they’re inviting responses from the public and industry stakeholders between April 12 2023 to June 7 2023.
The consultation covers proposed changes to the:
- Town and Country Planning (Use Classes Order) 1987
- Town and Country Planning (General Permitted Development) (England) Order 2015
- Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) Regulations 2012
There are lots up for discussion, including the introduction of:
- A new use class for short-term lets and holiday rental homes
- A new permitted development right for the change of use from a dwellinghouse to a short-term let and vice versa (no need to obtain planning permission)
- A planning application fee for the development of new build short term lets
Also being considered is giving homeowners the flexibility to let out their home for a number of nights in a calendar year under use class C3 dwelling houses.
We’re often asked by clients “Do you need council approval for Airbnb?”.
This new consultation may see the introduction of holiday let use class planning permission akin to a special “Airbnb planning permission” category.
In this article, we consider how we’ve got here, the potential effects of the proposed changes to legislation, called by some the “Airbnb regulations” and the future for short-term lets in the UK.
Airbnb regulations: how we got here
In the past ten years, there has been a major shift in residential property markets here and around the world with the rise of sharing economy platforms such as Airbnb.
Until it became a problem, many saw the rise of short-term holiday rentals as the democratisation of the holiday sector.
Members of the public and middle-class investors could now make money from tourism without having to invest in a hotel, guest house or retail outlet. Instead, they’d buy an existing property, do it up and let it out for short periods to holidaymakers.
The problem is the exponential growth in the number of “UK hosts” and their short-term holiday rentals.
Tourists visiting our most cherished towns are choosing short-term holiday rentals over traditional hotel stays, attracted by their cost-effectiveness and homely comforts.
Demand was far greater than expected for this type of holiday accommodation. Holiday lets started looking like a great investment opportunity.
There have been consequences.
Excessive noise complaints, increased foot traffic, and a general change in the residential ambience of neighbourhoods are common grievances.
This has led to relationships between many owners of holiday lets and their long-standing resident neighbours becoming increasingly fraught.
Effect on local housing markets
It’s not just ambience. Demand for property from local residents and investors caused steeply accelerating house prices and rising living costs in general in too many communities.
Residential properties, particularly in popular tourist destinations, are being converted en masse into short-term holiday lets and that has seen many local people pushed out of their local communities.
It’s not just affecting buyers. Traditional renters are finding it harder and harder to find long-term accommodation, particularly at affordable prices.
These particular circumstances have, at a community level, begun to alter the fabric of neighbourhoods.
Towns and cities that were once vibrant communities are slowly transforming into transient hubs for tourists.
Local businesses now pivot to cater to tourists’ needs, further distancing the communities from their original identity.
Airbnb planning permission in the UK: what are the legal requirements?
When clients ask us “is planning permission required for Airbnb?”, the answer is yes.
While there is no specific Airbnb change of use planning permission, your local authority will require you to apply for planning permission if there is a material change of use from a residential dwelling to a holiday let.
Some local planning authorities have already reacted to the growth in holiday lets under powers given to them under the Deregulation Act of 2015.
Greater London was among the earlier adopters restricting the use of residential premises for short-term rental for 90 or fewer nights in a calendar year.
Many architect firms now advise would-be and existing short-term holiday let landlords check with local authorities whether their properties are covered by these rules.
Not so long ago, the government proposed a registration scheme to stop the growth in the number of holiday lets distorting the housing market and driving up prices.
Airbnb stated that they welcomed the idea for the register but cautioned any change to the planning permission system should “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”.
At time of writing, the registration scheme seems to have been dropped.
Where we are now with Airbnb regulation
This is a complex issue affecting landlords, tourists and local communities. In the absence of an agreed way forward, the Government put it out to consultation.
Culture Secretary Lucy Frazer told the Big Issue that the government “wants to get the balance right” when weighing up the interests of the tourism sector and providing affordable homes for local residents claiming that they have an “incomplete picture of the size and scale of the short-term lets market”.
In recent days, the North York Moors National Park Authority warned that short-term letting is “severely reducing the choice of homes for residents”.
At the launch of the consultation, Communities Secretary Michael Gove said: “I’m determined that we ensure that more people have access to local homes at affordable prices and that we prioritise families desperate to rent or buy a home of their own close to where they work.”
The Airbnb regulation ideas being presented by the government
There have been five proposals put forward by the government and they are as follows:
- A new use class for short-term lets: At the moment, short-term lets fall under the same ‘C3 Dwellinghouses’ use class as traditional homes. The proposed new use class, ‘C5 Short Term Let’ would be defined as “Use of a dwellinghouse that is not a sole or main residence for temporary sleeping accommodation for the purpose of holiday, leisure, recreation, business or other travel.” By requiring homeowners to apply for planning permission, local authorities would have more control over the number of short-term lets in their area.
- A new permitted development right for the change of use from a dwellinghouse to a short-term let: This would allow homeowners to change the use of their property from a traditional home to a short-term let without having to apply for planning permission. This would not be available however where there is a local issue with short-term lets.
- A new permitted development right for the change of use from a short-term let to a dwellinghouse: Property owners could change the use of their property from a short-term let back to a traditional home without needing to apply for planning permission under this proposal. The aim would be to increase the number of homes for sale or rent in areas where there are many short-term lets.
- Flexibility for homeowners to let out their home for a number of nights in a calendar year: This would involve making changes to the dwellinghouse use class or it could mean another permitted development right so that homeowners could let out their home for a certain number of nights per year. This is not dissimilar to the 90-day rule mentioned earlier. This could provide homeowners with an additional source of income and support tourism, particularly if there’s a major event.
- A planning application fee for the development of new build short-term lets: This would introduce a new fee for planning applications for the development of new short-term lets.
Airbnb regulation most asked question
Is Airbnb considered commercial use in the UK?
Yes. What you make through an Airbnb is considered taxable income if you own the property personally. Profits on rental will also be taxable if you own the property through a limited company.
Have your say
The full consultation is available online by clicking here.
Recently, we converted a church into an Airbnb location for a valued client. For more information on converting a property into a holiday let unit, please get in touch. We look forward to hearing from you.