To Regulate or Not Regulate? The Airbnb Question

The Government recently published a research briefing which looked at the growth of short-term lettings in England, their current regulation, the concerns which have been raised about them and how they might be dealt with.

Recent years have seen the rapid expansion of the short-term lettings sector with some reports suggesting that the number of Airbnb listings in London alone increased by almost 400% between April 2015 and March 2020.  This growth is in part a consequence of the fact that the majority of home owners can let their properties on a short-term basis without having to obtain planning for change of use although they remain subject to any private contractual restrictions such as the terms of a lease or a mortgage.

Whilst this rapid growth has brought benefits it has also led to concerns about the potential negative impacts such as landlords turning homes into letting businesses and the consequent impact on the supply of local housing and also the failure of some home owners to comply with relevant health and safety legislation.

Previous Governments took the view that regulation was not required and instead encouraged the industry body, the UK Short Term Accommodation Association, to promote best practice for short-term lettings including an accreditation scheme.  However despite this, calls for regulation of the sector have continued and in April 2019 Sadiq Khan called for a registration system for short-term lettings in London to enable local authorities to monitor the number of short-term lettings within their area.  The All-Party Parliamentary Group for Tourism, Leisure and the Hospitality Industry (APPG) also held an inquiry into the impact of the sharing economy on the UK tourism industry which recommended that the Government launch a consultation to establish a registration scheme for tourism accommodation businesses and that the Government give local authorities powers to develop rules to balance the benefits generated by this type of  accommodation with the needs of local residents.

There have also been a number of well publicised cases of other countries introducing measures to regulate short-term lettings and most recently legislation has been approved in Scotland under which local authorities have until 1 October this year to establish licensing schemes and existing landlords will have to apply for licences for their properties by 1 April 2023.  The Welsh Government finished a consultation last month on planning legislation and policy for second homes and short-term holiday lets which proposed measures such as introducing new planning use classes for primary homes, secondary homes and short-term holiday lets.

The Government’s Tourism Recovery Plan published in June 2021 included a commitment to consult on the possible introduction of a statutory tourist accommodation registration scheme and it is anticipated that the Government will shortly publish a call for evidence on this.

In England it is increasingly a case of “when” the sector is going to be regulated rather than “if” and we will keep you up to date with any future developments on this.

If you would like any more information in relation to the above please contact James Davies or any member of the Property Team.

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