Short-term lets and holiday rentals: proposed new planning controls
Currently (outside of London) there is no prescribed limit on the number of days a property may be let on a short-term basis. This means that, provided there has not been a "material change of use", planning permission would not be required to use an existing residential dwelling as a holiday let or short-term Airbnb-style rental. But the Government is planning to introduce new legislation that would allow local planning authorities to control the use of residential dwellings and require planning consent for the use of short-term rentals or holiday lets.
The current definitions
In most cases the use of a residential dwelling as a short-term rental or holiday let would not be treated as a "material change of use" requiring planning permission. However, there is no statutory definition of a "material change of use"; rather it is a consideration of fact and degree which means that cases are determined on their own individual merits. Short-term lets are generally considered to fall within Class C3 (Dwelling Houses). This use class is defined as follows:
- a single person or by people to be regarded as forming a single household;
- on more than six residents living together as a single household where care is provided for residents, or
- not more than six residents living together as a single household where no care is provided to residents.
The situation is slightly different in London, where letting on a short-term basis for more than 90 nights a year constitutes a material change of use and planning permission is therefore required. However, it is well reported that there are difficulties with enforcement of this control as it can be difficult for a local authority to monitor how many nights a property is let.
According to The Guardian, the number of active listings on Airbnb in Great Britain more than tripled from 76,000 to more than 257,000 between April 2016 and January 2020. The issue of ‘hollowing out’ of communities is a concern, with the viability of local shops, schools and other local services impacted by the lack of a permanent population and properties being left vacant over winter.
The government has recently set out their intentions to bring forward planning controls within the Levelling Up and Regeneration Bill (LURB) to allow for planning restrictions to be placed on transforming homes into short-term lets.
Government consultation into holiday lets
The government has just launched a consultation on the introduction of a new use class for short-term lets and holiday lets. Short-term lets and holiday lets would fall within a new use class which would be known as 'Class C5'. Permitted development rights would allow a change between Class C3 (residential) and Class C5 (short term or holiday lets) without the need for planning permission. But local authorities will have the power to remove the permitted development right by introducing article 4 directions which restrict permitted development rights. Where an article 4 direction is introduced planning consent would need to be obtained before changing the use from Class C3 (residential) to Class C5 (short-term let or holiday let).
The proposed definitions
The proposed definition of 'short-term let' (which would apply to all types of holiday let or short-term lettings) is as follows: use of a dwellinghouse that is not a sole or main residence for temporary sleeping accommodation for the purpose of holiday, leisure, recreation, business, or other travel. This means that the letting out of a room or rooms, for example to a lodger, within a ‘sole or main’ dwelling house will be unaffected by the introduction of the new class.
The government are also consulting on whether the planning controls should expressly provide a degree of flexibility for Class C3 dwelling houses to be let out for a number of nights a year, i.e. if an owner goes on holiday and wishes to let out their property in the meantime. However, the flexibility proposed would be diminished by the fact that the property would first have to be registered on a central register with the local planning authority and further it must be considered that this flexibility could lead to the same issues currently faced by local authorities in London when it comes to enforcement of the planning controls mentioned above.
A two-tier housing market
Where these planning controls are put in place, a two-tier housing market could operate: those properties that were used for short-term lettings before the changes and can continue as such, and those that were not in use for short-term lettings prior to the new rules coming into force and where planning permission would be required for any change to short-term lettings. Some fear that it could result in a rush to convert dwellings into short-term lets ahead of the changes coming into force, thereby exacerbating the problem that the changes seek to address.
Whilst these changes only being consulted on now, those with an intention to let out their property in the future should be mindful of these proposals and may wish to comment on the government consultation which is open until 7 June 2023.
If you wish to discuss any issues of this nature, then please do not hesitate to get in touch with our Planning team at Trowers & Hamlins.