2024 Outlook: Regulation, Legislation and the Unknown:

The short-let industry in London has long been a succeeding sector, providing tourists and travellers with a range of accommodation options and homeowners an attractive source of income. However, over the years there have been recent developments in regulation which are reshaping the landscape, impacting both providers and consumers alike.

In response to concerns over housing availability and neighbourhood disruptions, the local government has implemented stringent regulations on short-term rentals. These measures aim to strike a balance between supporting the flourishing tourism industry and addressing the housing crisis.  One significant development is the implementation of stricter licensing requirements and the imposition of limits on the number of days a property can be rented out for short stays.

In Greater London, a host is permitted to lease their entire property for up to 90 days without obtaining the requisite planning consent. Should this Airbnb duration exceed the 90 day limit then securing a modification in planning permission becomes necessary to align with regulatory standards. Any violation of this 90-day limit is deemed a breach of building permission and risks local councils taking planning enforcement action against them. 

It is important to emphasise that the regulations governing short-term rentals exclusively apply to those leasing out their entire property for short durations of time. There is no limit to the number of days or amount of rooms they are permitted to let each year. If your house is already in residential use lawfully then there is no requirement for obtaining planning permission to lease it to long-term occupants for periods exceeding 90 nights at a time. 

As a proprietor of short-term rentals, you bear a responsibility to exercise due care for your guests, entailing the provision of secure accommodations and efforts to minimise potential hazards. To fulfil this obligation effectively, it is crucial to be well-versed in and comprehend the pertinent health and safety regulations governing short-term rentals. All properties must adhere to the Regulatory Reform (Fire Safety) Order 2005 (applicable to England and Wales), which mandates the implementation of a comprehensive fire safety risk assessment. Additionally, in accordance with Health and Safety Executive (HSE) guidance on gas safety, it is obligatory to have all gas appliances inspected and approved annually by a certified Gas Safe Engineer. A valid certification should be visibly placed at the property for the perusal of guests.

While adhering to these measures may contribute to increased operational costs for short-term rental businesses, it serves the paramount purpose of ensuring a hazard-free environment and, consequently, the safety of occupants. Embracing these regulatory obligations not only upholds the duty of care owed to guests but also safeguards the reputation and integrity of the short-term rental enterprise.

While these regulations may contribute to the better management of housing resources and neighbourhood harmony, they pose significant challenges for short-let operators. The additional bureaucratic hurdles and associated costs may lead to a reduction in the number of available short-term rentals, limiting choices for visitors and potentially driving up prices. 

In conclusion, while regulations in the short-let industry are well-intentioned in addressing housing concerns and ensuring guests are looked after, they may reshape the market dynamics, affecting both providers and consumers. Short Let owners need to ensure they meet these regulatory measures if they want to continue flourishing in London's short-let sector, failure to comply with these regulations could pose risks to the viability of the business.

The growth in short-term lettings and their concentration in certain neighbourhoods have had some issues raised with the negative impact associated (https://commonslibrary.parliament.uk/research-briefings/cbp-8395/). One of these concerns is the negative effects on neighbours and local communities. Examples of these effects are issues such as noise disturbance and issues of antisocial behaviour. Moreover, there is apprehension that this expansion will influence the local housing market, specifically with regard to supply and rental prices. There is also worry for owners of bed and breakfast accommodation and hotels due to the growth of short term rentals leading to a decline in their customer base and sales.

In response to these concerns, the government has put forth proposed legislation aimed at addressing the situation. Firstly,  there is a commitment to implement a light-touch registration scheme for short-term lettings. This scheme is designed to enhance uniformity in the enforcement of health and safety regulations and furnish local authorities with comprehensive data regarding short-term lettings. 

They have also launched a proposed consultation which should give local authorities greater control over the number of short-term lettings in their area. The proposals involved in this consultation includes creating a new use class for short-term holiday lets to distinguish them from “dwellinghouses”, introducing “permitted development rights” for dwellinghouse to short-term holiday let conversions (and vice versa) so planning permission would usually not be required for these changes and giving local planning authorities the option to revoke these permitted development rights in their area using an “article 4 direction”.