Homeowners will need to get planning permission for future short-term lets under a government shake-up to prevent a 'hollowing out' of communities.
The proposed reforms in England would require homeowners to get the green light for short-term lets, the type seen on the likes of Airbnb.
A new planning ‘use class’ would be created for short-term lets that are not used as a sole or main home.
And a mandatory national register would also be set up to give local authorities information about short-term lets in their area.
There is currently no limit on the number of days a property can be let on a short-term basis in England. The exception is London, where homeowners need permission for short-term lets of more than 90 days a year.
When could the new rules kick in?
The changes are expected to come into force as soon as this summer.
They come after the government launched a consultation on the proposed reforms in April 2023.
Why is the government making the changes?
There has been a rise in the number of short-term lets in recent years. According to BBC analysis of council figures in 2022, the number of holiday lets in England climbed by 40% between 2018 and 2021.
Hotspots, such as Scarborough, the Isle of Wight, North Devon, the Cotswolds and Norfolk, saw 'sharp increases', it found.
Short-term lets have brought a range of benefits, such as income to local economies and homeowners in the area and more consumer choice.
But there have also been concerns about the growth. These include fears that residents are being 'pushed out' of their communities.
Generation Rent, a campaign group, points out: “Families are being driven out of their communities by the disastrous loss of homes into holiday lets, with over 35,000 privately rented homes lost to Airbnb-style short-term lets since 2019.”
The government says the proposed changes are part of a long-term plan to prevent a 'hollowing out' of communities, tackle anti-social behaviour and ensure local people can live in the place they call ‘home’.
Michael Gove, Secretary of State for Levelling Up Housing and Communities, explains: 'This will allow local communities to take back control and strike the right balance between protecting the visitor economy and ensuring local people get the homes they need.'
Lucian Cook, head of residential research at Savills, acknowledges there is 'little doubt' that the short-term rental market has taken homes out of the private rented sector.
'On that basis, local authorities will welcome the requirement for planning consent in the future, though this could place a short-term burden on their already constrained resources,' he says.
What could the proposals mean for homeowners?
Homeowners with an eye on future short-term lets would have to first seek planning permission from their local council.
So people keen to buy a short-term let property may want to get a good grasp of the local planning landscape before pressing ahead with a purchase. This would particularly be the case in holiday hotspots.
But homeowners with existing short-term lets won’t have to submit a planning application. These would automatically be reclassified into the new use class.
The new rules would not apply to homeowners who let their main or sole home for less than 90 days a year.
The government has not shed any light on how long it could take homeowners to get permission for short-term lets.
What we do know is that most planning applications are currently decided within eight weeks. Unusually large or complex cases could take up to 13 weeks, according to the Planning Portal.
The government also intends to introduce new permitted development rights. These enable certain changes without the need for a planning application.
Permitted development rights allow homeowners to change a short-term let into a standard home. They also allow homeowners to switch a property into a short-term let. Local authorities would be able to remove these rights and require full planning permission if they think it necessary.
The new rights suggest that some homeowners might not need to go the whole hog and get planning permission for future short-term lets.
Further details of the measures will be set out in the government’s response to the consultations.
Anna Ambrose, head of national lettings at Strutt & Parker, explains: 'We see huge benefit from short-term lettings when there’s a major event in a local calendar and local homeowners rent their main home out to visitors for a night or a weekend at a time.
'There’s resounding agreement that this part of the market should be protected and, so long as they don’t exceed 90 days in the year, these short-term landlords won’t be affected by the proposed new rules.'
Ambrose adds that investor landlords rarely enter the market with short-term lets front of mind, particularly where the traditional rental model is 'robust' and there’s a shortage of homes for rent.
She adds: 'If just some of those short-term landlords who will be required to apply for planning permission do decide to re-enter the long-term lettings market, then this would help relieve some pressure on demand, which will come as great relief to renters.'
What impact could they have on the housing market?
Cook reckons that the proposed reforms could create a two-tier market between those properties with and without a consent, particularly in second-home hotspots.
'But the extent to which it ensures homes become more affordable to local buyers will still be heavily dependent on levels of new housing delivery, that will be crucial to re-balancing supply and demand in these markets,' he adds.
A spokesperson for the National Residential Landlords Association (NRLA), says: 'The NRLA has long campaigned for the government to take action to prevent the loss of desperately needed rented homes to the short-term or holiday-let sector, and as such this policy is welcome.
'However, the government has failed to address the real issue driving investment out of the private residential sector, namely a tax regime that favours short-term lets.
'The single best way to deal with the movement of property from the provision of long-term, stable homes and into the holiday market is to reverse the disastrous tax changes introduced in 2015 that makes the short-let market more appealing by default.'
Timothy Douglas, head of policy and campaigns at Propertymark, says the membership body has always argued for parity between short-term lets and longer-term lettings.
He explains: 'Overall, the new register of short-term lets and new planning requirements should help to ensure local people are able to rent and buy more property in their area, but local authorities need to be adequately resourced to implement and manage the new regulations.'