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Embracing Regulation: A Positive Step for London's Short-Let Rental Market

Regulation in the short let market in london

In recent years, the short-term rental sector has surged in popularity, offering travellers a diverse array of accommodation options and homeowners an opportunity to earn extra income. 

According to Visit Britain, June 2023 saw over 432,000 short-term rental properties across the UK with projections estimating the most significant rental growth will be seen in 2024, reaching a peak of 5.5 percent. 

However, with this rapid growth comes the need for responsible oversight to ensure that the benefits of short-term rentals are maximised while mitigating potential negative impacts on communities and housing markets. In London, the call for regulation in the short-term sector is seen as necessary by many.

On the 19th Feb, the government issued a press release outlining its proposal for such regulation in London. The proposal spoke of the need for planning permission and change of use categorisation for companies and individuals wishing to continue marketing their properties in the short let sector via platforms such as and Airbnb. 

The press release further highlighted that the government plans to introduce associated permitted development rights, including one that permits the conversion of a property from a short-term let to a standard residential dwelling, and another that allows a property to be converted into a short-term let too. However, local authorities will retain the authority to revoke these permissions and require full planning permission if they consider it necessary.

A mandatory national register is also being introduced, providing valuable information to local authorities about properties being let in the market. This is aimed to help ensure accommodation is safe and that operators comply with health and safety regulations amongst other conditions too, something I am sure we all welcome. 

Regulating short-term rental platforms in London promises to bring about a host of positive changes that will benefit both residents and visitors alike. There are several reasons why embracing regulation is a step in the right direction.

  1. Hosts and managers will be held to a certain standard. They will be accountable for health and safety measures across all of their properties, ensuring guest confidence that properties are looked after and kept to a high standard.

  2. Regulation contributes to neighbourhood stability. Unregulated short-term rentals can disrupt residential areas, leading to increased noise, parking problems, and changes in community dynamics. By implementing regulations, local authorities can address these concerns, preserving the character and tranquillity of neighbourhoods across London, while allowing short let operators to operate professionally.

  3. Higher barrier to entry. Currently, the ease in which the rent-to-rent model facilitates more and more short let properties to enter the market, has resulted in over saturation of short let properties in certain areas, which has inevitably pushed down nightly rates and standards, forcing hosts to compete on price, rather than an emphasis on quality. Such regulation will allow an ease of supply, as many rent-to-rent operators may not see the sense in spending the money required to register, and go through the required planning processes to keep their properties live. 

  4. Land Grab. Over time we have seen many operators take on properties for the sake of increasing their properties under management quota and portfolio size. Neglecting, and sometimes never even visiting properties held under their management. Conditions in these properties are neglected, and maintenance issues are never put right, such operators will now hopefully think twice about which properties they take on, and which properties are worth their time and effort, all in all resulting in a better stay experience for their guests. 

Lastly, regulation provides not only guest protection, but protection for our operators, who until now have not had such frameworks to abide by, further protecting them in any unforeseen circumstances. Operators deserve clear policies and guidelines, recourse in case of disputes, and standards for cleanliness and amenities. By establishing guidelines and oversight mechanisms, regulation enhances confidence and satisfaction.

On the other hand, regulating shortlets in the UK might be perceived negatively by some due to potential restrictions and requirements imposed on hosts, limiting their operational flexibility and autonomy. 

For hosts accustomed to the freedom inherent in short-term rental operations, such regulations could feel burdensome and constraining.

Additionally, compliance with regulatory measures may introduce added expenses for hosts, including registration fees, safety upgrades, and taxes. These financial obligations could erode profitability, particularly for hosts who heavily rely on short let income as a primary source of revenue, potentially leading to economic strain for individuals dependent on short-term rentals.

In conclusion, we all knew regulation was not an “if” but a “when” for London, and perhaps for the majority in our community, this will mean not an end to their operating, but just a change in how they continue to operate. Taking into consideration that our sector made it through COVID-19 by adapting to the rules and regulations of that time, we can do the same here again.

I think we all welcome a business terrain where the barrier to entry is slightly harder and therefore those who take part are more dedicated to providing a better standard and experience for our guests, ensuring the longevity of our sector as a whole.   


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