The short-term lettings sector has grown rapidly over recent years. In 2022, the House of Lords Built Environment Select Committee, which I chair, conducted an inquiry into the short-term lettings sector in England and its impact on local areas. Since our letter was published (Dec 2022), the Government has announced a consultation on a registration scheme for short-term lets in England, proposing amendments to the Levelling-up and Regeneration Bill currently going through Parliament to provide any such scheme with a statutory basis.
The rapid growth in short-term lets conducted through platforms such as Airbnb has created winners and losers. Property-owners wanting to generate additional income, holidaymakers looking for alternative accommodation to traditional hotels and small businesses keen to capitalise on extra tourism may all benefit from the rise in short-term lets. However, as our first Committee report, Meeting housing demand (Jan 2022), emphasised, many parts of the UK lack sufficient housing to meet demand; in some areas this problem is acute. Concerns have been raised about the effect of the growth in short-term lettings on the availability of homes for local permanent residents.
During our inquiry we discovered that certain hotspots – notably London, the South West and the Lake District – are so inundated by short-term lettings that local workers and families find it challenging to live a reasonable distance from their workplaces and schools. On the other hand, outside these hotspots it is far less certain that short-term lets are having a measurable effect on local housing markets.
So we welcome the fact that the Government have listened to our concerns and are open to taking action. Although much crucial detail has yet to be disclosed by the Government, a registration scheme could be an important tool in gathering data on short-term lets and could help local authorities take appropriate measures to manage short-term lets in their area.
But the committee was strongly of the view that it was important to distinguish between those areas with a high density of short-term lets which compromise the availability of housing, and those areas where this is not an issue or where it could even boost the local economy. We heard from one local council where between 2021 and 2022 approximately 75% of the new additions to the housing stock required to meet local need, as defined by the planning process, were lost to the short-term letting sector straightaway. Between 2014 and 2021 there was a 571% increase in the number of entire home listings in London. But this is by no means a widespread picture.
So we were clear to Government that any registration scheme should be an option for local authorities to introduce at their discretion. A mandatory national approach would be disproportionate, given the low demand in some areas. Where a local authority does opt to introduce a registration scheme, we advised that those authorities should be supported to ensure they had the capacity and capability to deliver the scheme effectively.
And we are very strongly of the view that any registration scheme should not deter property owners from renting out spare rooms in their primary residence. Our evidence indicated that eight out of 10 hosts are renting out one listing, often in their primary residence. The use of spare rooms in a primary residence provides an important source of additional income, can offer companionship and ensures the housing stock is well-used.
The Government has committed to consult on whether planning permission should be required for new short term lets, especially in tourist hotspots. We are in favour of giving local authorities the power to decide whether to require change-of-use planning permission for new short-term lets in their areas, but we do not believe this should be a nationwide requirement.
We found a lack of authoritative data on the short-term lets sector in England, including from the online platforms themselves. A registration scheme could resolve this and provide timely and accurate data to local authorities and central Government. Short-term lettings online platforms – which include Vrbo, Tripadvisor and Booking.com, as well as the market leader, Airbnb – should be more transparent in publishing data about listings on their sites. This would support effective enforcement of the proposed scheme and allow for future policy development to be more evidence based.
We have written a follow-up letter to the Government emphasising our support for a proportionate and locally led registration scheme. We have been clear that those local authorities most impacted by short-term lets must have the necessary capability and capacity to ensure the potential benefits of this approach are realised.
Members of the Built Environment Committee are continuing to engage in these issues throughout the passage of the Levelling Up and Regeneration Bill. Our next report assessing the impact of environmental regulations on development will be published in the Autumn.
Lord Moylan is chair of the House of Lords Built Environment Committee.
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