Short-term letting on the brink of regulatory overhaul

09 Mar 2020

Online platforms like Airbnb are on the brink of a regulatory overhaul, but whether it will be through self-regulation or government intervention remains unclear.

The use of Airbnb and other sites has soared in recent years, but the original idea of people renting out the spare room in their house for one or two nights has significantly changed to the extent that between 2016 and 2017, 55% of listings were for whole properties.

The surge in short-term lets has brought with it a number of issues including the use of social housing for lets, and properties being used for illegal purposes and attracting anti-social behaviour. In addition, some local authorities say it is having an adverse effect on the housing market, especially for first time buyers and low-income families because the lack of available housing in popular short-term let areas has inflated property prices.

To date, the only attempt to regulate the industry by legislation has been the Deregulation Act 2015 which meant homeowners in Greater London had to apply for planning permission for “change of use” if they planned to use their property as a short-term let for more than a 90-day period in one year.

Tower Hamlets has taken it one step further and has requested that the Government requires homeowners to obtain planning permission from the local authority for permission for any short-term lets.

So far though, the government has failed to respond, apart from the publication of a paper called “The growth in short-term lettings (England)”, where it has said it would prefer to see the industry self-regulate to improve standards and promote best practice.

However, earlier this year, the Mayor of London, Sadiq Khan, called on the Government to introduce a new registration system for those wishing to rent a property for short-term lets. He was backed by six central London Boroughs and Airbnb itself.

There are also a number of emerging voices from organisations like the Chartered Institute of Housing, which advocates government regulation of the industry.

Whether regulation evolves through tighter self-regulation or by means of legislation, the industry is definitely on the brink of a regulatory overhaul.

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