The growth in short-term lettings (England)

The number of short-term lettings in England has increased significantly in recent years, due to the development and growth of the ‘sharing economy’ and ‘peer-to-peer’ accommodation services such as Airbnb.

These online platforms essentially provide marketplaces which connect people who want to rent out their properties or spare rooms with people seeking short-term accommodation.

Restrictions on short-term lettings

Outside London, there is no specific limit on the number of days a property can be let out on a short-term basis. It is up to the local planning authority (LPA) to make a judgement as to whether a letting amounts to a material change of use, for which planning permission must be sought.

Different rules apply to London homeowners. Those who wish to use residential premises for short-term accommodation for more than 90 nights in a calendar year must seek planning permission from their LPA. 

Alongside planning rules, in some cases tenancy, lease and mortgage agreements may prohibit or restrict short-term lettings.

Concerns around the growth in short-term lettings

Proponents highlight the benefits of the accommodation sharing economy for consumers, providers and the economy in general. However, concerns have been raised about the negative impacts associated with the rapid growth in short-term lettings and their concentration in certain neighbourhoods.

Key concerns include:

• commercial operators using residential properties as letting businesses in breach of planning rules.
• the challenges local authorities face in taking planning enforcement action.
• the effect on local housing markets.
• negative effects on neighbours and local communities, for example from noise disturbance and anti-social behaviour.
• taxation compliance and compliance with health and safety regulations.
• the implications for traditional short-term accommodation businesses such as hotels and bed and breakfast accommodation.

Calls for greater regulation of short-term lettings

There have been calls from a range of organisations, commentators and politicians for greater regulation of the sector.

The Government has committed to consult on the possible introduction of a Tourist Accommodation Registration Scheme in England. It intends to publish a call for evidence in early 2022, to assist in developing policy options for the consultation.

Regulation of short-term lettings in other countries

The Scottish Government has given local authorities the power to introduce ‘short-term let control areas’. It is also introducing a licensing scheme for short-term lets. Subject to approval by the Scottish Parliament, local authorities will have until 1 October 2022 to establish a licensing scheme and existing hosts will have until 1 April 2023 to apply for a licence. 

The Welsh Government is consulting on proposals to amend the development management system and planning policy in Wales to help LPAs manage short-term holiday lets. It has also consulted on the effectiveness of local taxes for self-catering accommodation and is exploring the potential for a statutory registration scheme for holiday accommodation.

All tourist accommodation in Northern Ireland must be certified by Tourism NI, a non-departmental public body of the Department for the Economy.

Outside the UK, many European countries and cities have introduced, or are in the process of introducing, measures to regulate short-term lettings. Regulatory approaches vary according to contextual factors, such as the housing market, tourism economy and local land use law.