A Conservative borough has rejected government reforms allowing Londoners to rent out their homes on a short-term basis.

Measures announced by housing minister Brandon Lewis will allow residents living in the capital to let their homes for a maximum of 90 days on websites such as Gumtree and Airbnb without facing potential fines.

Yet Westminster City Council called for the maximum rent period to be shortened while raising fears of London streets becoming a ‘chain of default hotels with rooms rented out at exorbitant prices’.

Laws dating back to 1973 currently force Londoners who wish to rent out their home for less than three months to apply for planning permission or face a fine of up £20,000.

The Government branded such regulations ‘poorly and confusingly enforced’, adding that new measures would boost tourism by increasing availability of cheaper accommodation.

Councils will be allowed to withdraw the right for properties to benefit from the new flexibilities or request local exemptions.

Lewis said: ‘We live in the 21st century, and London homeowners should be able to rent out their home for a short period without having to pay for a council permit. These laws date from the long-gone era of the GLC, and need to be updated for the Internet age.

‘We are putting in some common sense measures to protect local amenity, whilst allowing Londoners who go on holiday to make a bit of extra money by renting out their home whilst they are away.’

Responding to the announcement, Westminster City Council cabinet member for sustainability, Cllr Heather Acton, said: ‘This is a step in the right direction, but it doesn’t go nearly far enough. Short term letting is a major issue in central London, and local businesses and residents have raised concerns in equal measure.

‘Our own observations have shown us the scale of the issue – from housing benefit fraud and illegal immigration, to vomit on the doorstep and fires in the corridors.

‘So, to be clear, we are asking for two things: A simple, online, one-click-of-the-button registration, to help us understand when someone is letting their flat and for how long. And a reduction in the length of a short term lets from three months to one month. So we can be sure that it is for holiday purposes.’

She added that Westminster’s concerns were ‘not about being bureaucratic’ and instead ‘about making sure housing in central London does not become a chain of default hotels with rooms rented out at exorbitant prices to the highest bidder’.