Regulating short-term lets in England
Interested in why new regulations are coming to the short-term rental market in England? Here’s the story.
On February 19th 2024, the government announced new rules for short-term lets. Specifically, a mandatory national register will be established for short-term lets to allow local councils to better monitor this activity in their areas. The reforms will also make such rentals subject to local planning permission.
The move is a response to concerns that the rapid growth of short-term lets in recent years is impacting the availability and affordability of homes, particularly in more popular destinations. There are also concerns about compliance with health and safety regulations, given the current lack of oversight of these rentals.
Yet at the same time, regulating this market would always need to be a balancing act, as short-term lets also bring benefits both to homeowners as well as their broader communities by boosting tourism and associated spending. Further complicating the picture was a general lack of information: to date, in England there is no definitive source of data on the short-term rental market. No one knows exactly how many people use these services each year, or even how many rental properties there are in the country.
The Call for Evidence
In this context, the Department for Culture, Media and Sport (DCMS) had issued a call for evidence on short-term and holiday rentals. Alma Economics was then asked to analyse the over 3,000 responses received.
The video below provides a breakdown of our findings that informed the newly announced policies, while our full report can be found here.
In addition to covering the benefits of short-term lets, challenges within the sector and the potential impact of regulatory options, the call for evidence asked respondents to share data illustrating the size and nature of the short-term and holiday letting market in England.
Key findings from the call for evidence included:
• Based on data shared by organisations, there were around 257,000 short-term and holiday lets in England in 2022, nearly two-thirds of which are found in the South West, South East or London.
• Around 75% of total short-term let listings are for entire premises. Most properties are occupied by visitors for fewer than 30 days each year, with an average booking length of 3-4 days.
• Most respondents agreed that levels of compliance with statutory regulations (such as fire/gas safety or food and drink) were good and breaches of contractual agreements (such as mortgage, tenancy and social housing agreements) were not a major problem.
• Most respondents did not view noise, anti-social or other nuisance behaviour from short-term and holiday lets to be a major problem. However respondents were evenly divided on the impacts of short-term and holiday lets on housing markets, as well as on the social dynamics and economic trajectory of local communities.
• More than half of respondents preferred some form of regulatory intervention in the sector, although there was no consensus over the form this should take.
One important limitation of these findings is that the views shared as part of the call for evidence only represent a small proportion of the market and those who participated were likely to be more knowledgeable about their legal obligations and have made active efforts to comply.
However, the call for evidence shed light on how different stakeholders perceive the strengths and shortcomings of the sector, providing valuable guidance to the government in determining the next steps and regulatory options.
How should a national registration scheme for short-term lets operate?
DCMS also held a subsequent public consultation on how a national registration scheme should operate, again commissioning Alma Economics to analyse the responses.
According to DCMS, the government’s response to that consultation will be released later in the year, along with the details of how the national registration scheme will operate.