Councils are awaiting timelines and guidelines from the Secretary of State for Housing but make no mistake short stay ' airbnb's' are now by law to be properly regulated in terms of Health & Safety and to make sure that proper permissions are in place. Can you be a short term let winner ?
May 2024
Light touch online registration put forward by Visit England / AA
The first introduction of a registration scheme may be ‘ light touch’ and we note that Visit England / AA the official tourist board have very recently introduced a new totally online registration called ‘ Visitor Ready’ https://business.ratedtrips.com/assessment/AA-and-VisitEngland-scheme-modernisation-overview … this may be a format that the government will approve for their own Holiday Let Registration Scheme.
May 2024
Leasehold apartments require permission letter to qualify for registration
The new Visitor Ready registration scheme does not accept leasehold apartments onto the short let registration scheme unless they can upload :
- A Letter of authority from their block management company or Freeholder.
- Property specific insurance for Public & Employers liability.
- Fire Risk Assessment
- Health & Safety certificates
May 2024
Not registered then no OTA advertising !
The Levelling Up & Regeneration Act 2023 appears to state that if a short let property is not a registered short let then the OTA platforms such as airbnb and others should NOT BE ALLOWED to advertise those properties. We wait to see how airbnb intend to enforce this law.
'...prohibiting the provision of a short-term rental property or anything done wholly or partly for the purposes of promoting such a property to the public or a section of the public, in the course of a trade or business, where the property is not registered or another requirement imposed by regulations under this section has not been met...'
HMRC Regulations for short term let platforms
HMRC have set out new regulations for UK 'intermediaries' such as self-catering agencies and online booking platforms including Airbnb. One requirement is that those advertising holiday lets will need to declare the Land Registry reference number for the holiday rental property which will show legal ownership.
New planning use class for short / holiday let property
There will now be a new C5 Planning Use Class for holiday / short let properties.
Properties already operating as a short let / holiday let should automatically be passported over to this new C5 planning use.
Property owners will be given ‘ Permitted Development Rights’ which means they can move freely between a residential C3 and short let use C5 without applying for planning permission…unless your local council decide to bring in an Article 4 Directive restricting holiday / short let properties within their city or borough.
New fire regulations for short stay properties - Now Law
Update October 2023
All short let properties must now legally comply with new fire and health & safety requirements. The new regulations now form part of airbnb's user terms & conditions, and are likely to form part of a future registration scheme for short letting.
The short let sector is professionalising and no doubt a registration scheme would only be open to properties that have the correct permissions to operate. read more
Read up to date fire health and safety requirements :
Update April 2023
The new business rates rules 1st April 2023 - Now Law
Under the new rules in England, self-catering accommodation will be assessed for business rates rather than council tax only if the owner can provide evidence that:
- it will be available for letting commercially*, as self-catering accommodation, for short periods totalling at least 140 days in the year after the day in question
- during the previous year, it was available for letting commercially, as self-catering accommodation, for short periods totalling at least 140 days
- during the previous year, it was actually let commercially, as self-catering accommodation, for short periods totalling at least 70 days
*“Commercially” is defined in the legislation as being “on a commercial basis, and with a view to the realisation of profits”. This will usually mean the property being let at market rates and actively advertised, for example through commercial marketing sites and publications. Lettings to friends or relatives at zero or nominal rents will not be covered.
These rules apply from 1 April 2022, but as they require retrospective evidence over the previous 12 months they do not come into effect until 1 April 2023.
Newly available holiday lets
A property that becomes newly available as a holiday let (or that is purpose built as a holiday let) will be liable for council tax for each day until it has been available for 140 days and let out for 70 days in the previous 12 months. On the day that these two criteria are met, assuming the property will continue to be available for 140 days in the coming 12 months, it will qualify for a business rates assessment.
For example, a property that is first advertised as a holiday let would be liable for council tax for the next 140 days. If it was actually let out for 70 of these days, on day 141, it would qualify for a business rates assessment (provided the owner intended to advertise it for 140 days in the coming 12 months).
What you need to do
If you own a holiday let self-catering accommodation you should ensure you are now gathering the evidence required to meet the new rules.
The Valuation Office Agency is contacting customers from 24 October 2022 to let them know about the new eligibility rules and will be sending letters to owners of self-catering properties currently in the business rates list.
The Valuation Office Agency will be carrying out compliance checks to ensure properties meet the new requirements and moving properties back to the council tax list if they do not. If you feel your property will not meet the new requirements you should contact the Valuation Office Agency as soon as possible to avoid a large backdated council tax bill.
Update 26th October 2023
Levelling Up & Regeneration Act - Now Law
Part 12 Miscellaneous
228 - Registration of short-term rental properties
(1)The Secretary of State must by regulations make provision requiring or permitting the registration of specified short-term rental properties in England.
(2)“Short-term rental property” means—
(a)a dwelling, or part of a dwelling, which is provided by a person (“the host”) to another person (“the guest”)—
(i)for use by the guest as accommodation other than the guest’s only or principal residence,
(ii)in return for payment (whether or not by the guest), and
(iii)in the course of a trade or business carried on by the host, and
(b)any dwelling or premises, or part of a dwelling or premises, not falling within paragraph (a) which is specified for the purposes of this paragraph.
(3)The Secretary of State must consult the public before making the first regulations under this section.
(4)The requirement in subsection (3) may be satisfied by consultation undertaken before the coming into force of this section.
(5)Regulations under this section may, in particular, include provision about or in connection with—
(a)who may, or must, maintain the register or registers provided for under this section;
(b)who may, or must, register a specified short-term rental property on any register provided for under this section;
(c)conditions that must be satisfied for a specified short-term rental property to be registered or conditions that may be placed upon a specified short-term rental property’s registration (including provision about the circumstances in which such conditions may be varied);
(d)the circumstances in which the registration of a specified short-term rental property may be revoked;
(e)procedural requirements relating to the registration of a specified short-term rental property, the variation of any conditions placed on the registration or the revocation of the registration;
(f)appeals against decisions made in relation to the registration of a specified short-term rental property;
(g)the form or content of—
(i)a register provided for under this section,
(ii)an application for registration on such a register, or
(iii)any other document provided for under this section;
(h)how the registration of a specified short-term rental property may or must be publicised;
(i)the collection, provision or publication of information in connection with regulations under this section;
(j)exemptions from some or all of the requirements imposed by regulations under this section;
(k)prohibiting the provision of a short-term rental property or anything done wholly or partly for the purposes of promoting such a property to the public or a section of the public, in the course of a trade or business, where the property is not registered or another requirement imposed by regulations under this section has not been met;
(l)the enforcement of requirements or prohibitions imposed by regulations made under this section.
(6)Provision under subsection (5)(l) may, in particular, include provision—
(a)conferring a power on a court or tribunal;
(b)for the imposition of civil sanctions and appeals against such sanctions.
(7)Regulations under this section may make provision for the imposition of civil sanctions whether or not the conduct in respect of which the sanction is imposed constitutes an offence.
(8)Regulations under this section may—
(a)provide for the charging of fees or other charges;
(b)confer a function, including a function involving the exercise of a discretion, on any person;
(c)relate to all or only part of England (and still discharge the duty in subsection (1)).
(9)In this section—
-
“civil sanction” means a sanction of a kind for which provision may be made under Part 3 of the Regulatory Enforcement and Sanctions Act 2008 (fixed monetary penalties, discretionary requirements, stop notices, enforcement undertakings);
-
“premises” includes any place and, in particular, includes—
(a)
any vehicle or vessel;
(b)
any tent or moveable structure;
-
“specified” means specified or described in regulations made under this section.
.
April 2023
A judge rules that tenants who rent Airbnb properties for long periods have effectively signed ASTs
In the case of Abbasi V's Bolza, a judge ordered a landlord who claimed he let his apartment out on a 'airbnb basis' but on a longer term basis, must pay damages and compensation to his tenants when he tried to take steps to limit essential services provided to the tenants.
Learn about flexi-lets
Covenant for residential use could prevent use as Holiday Let
If a lease provides that a property may only be used for residential purposes, can it be used for holiday lettings?
‘No’ is the answer.
Flexi-let option provides the answer for many urban short lets
If a lease states that the property can only be used for residential purposes, it would be a breach of the user clause to use the property for holiday lettings. A residential building is defined as one which is either:
Designed as a dwelling or number of dwellings; or Intended for use solely for a relevant residential purpose (which includes hospices, old people’s homes and any building which is the sole or main residence of at least 90% of its residents but does not include hospitals, prisons or similar institutions).
(Group 5, Schedule 8, Value Added Tax Act 1994.)
A dwelling is generally held to mean a place where someone dwells and which they treat as their home. This definition follows from a House of Lords judgment in a Housing Act case, Uratemp Ventures Ltd v Collins ([2002] 1 All ER 46.
In Caradon District Council v Paton and Bussell (2001) CA 33 HLR 34, the Court of Appeal considered the issue of whether you could properly describe the occupation of those who are tenants for the purposes of their holiday as being occupation for the purposes of the use of the dwelling house as their home. The court concluded that you could not (see Caradon District Council v Paton and Bussell [2001]).
In Walker v Kenley [2008] EWHC 370, the court held that objectively construed, residential flats were flats for use as permanent residences and as such the term did not include
holiday flats.
It therefore seems to logically follow that if a lease restricts the use of the property for “residential purposes”, the purpose of the restriction is to ensure that the property is occupied only as a main residence, someone’s home. It is intended to prevent transient occupiers and as such, holiday lettings.
Other issues to consider
The lease is likely to contain restrictions on subletting or sharing occupation and possession. This would preclude allowing third parties to use the property for a holiday letting.
Leases may directly provide that the property is not to be left vacant for more than a given period at any one time. Even if this is not expressly stated, the restriction may apply through an obligation to comply with all the requirements of the insurance policy for the property. This is likely to make use of the property for holidays only, whether by a tenant or by third parties through holiday lets from a tenant, impractical.
The tenant will have to comply with planning requirements. You need to establish the use class the property falls in and then whether a material change of use has occurred.
It has been argued that if property is used for holiday lettings then it does not fall within Class C3 (dwelling houses) of the Town and Country (Use Classes) Order 1987 (SI 1987/764). However, in R v Tunbridge Wells Borough Council ex parte Blue Boys [1990] 1 PLR 55 it was held that a change of use from self catering units to residential units would not require planning permission as both uses fell within Class C3 (dwelling houses).
If the lease is mortgaged, there is likely to be a restriction in the mortgage prohibiting the borrower from letting the property without the consent of the lender.
Caradon District Council v Paton and Bussell [2001]
In Caradon District Council v Paton and Bussell (2001) CA 33 HLR 34, two freehold properties were subject to identical covenants that restricted their use to that of a private dwelling house. The owners of the properties did not occupy the properties but rented them to tenants on short term holiday lets in the summer months.
The covenant stated “Not to use or permit to be used the property for any purpose other than that of a private dwelling house and no trade or business or manufacture of any kind shall at any time be permitted to be set up or carried on on any part of the property or in any building now or hereafter within the perpetuity period erected thereon…..”
The purpose of the covenant was to ensure that the houses were used as dwellings (to prevent the loss of housing stock in the area) and to prevent business use. Whether a property is being used as a dwelling house is a matter of fact and degree.
The Court of Appeal held that when determining the proper construction to be afforded to a covenant, it is necessary to consider its purpose. It held that where the object of a covenant is to protect the amenity of an area by retaining properties as part of the local housing stock, the appropriate test for determining whether property is used as private dwelling house is to consider whether it is being used by the occupant as a home. Use of property as a home requires a degree of permanence and an intention by the occupant that the property should be a home. Accordingly, a tenant who rented property for a short time for the purpose of a holiday did not, and did not intend to, occupy the property as a home.
Latham LJ stated “I consider that the answer to the question posed by this case is dependent on whether or not one can properly describe the occupation of those who are tenants for the purposes of their holiday as being occupation for the purposes of the use of the dwelling house as their home”. Latham LJ considered that a person who is in a holiday property for a week or two would not describe that as his or her home and therefore the use was in breach of the restrictive covenant.
This case highlights the importance of looking at the wording of a covenant and the reasons for its imposition.
Update April 2023
Renters Reform Act Before House Of Commons In Two Months
Michael Gove (has just promised a reporter that the long threatened Renters Reform Bill will be introduced into the House of commons in two months’ time. Gove told Laura Kuennsberg: “We’re bringing forward reforms a little later this year - in a couple of months’ time actually - to see how the private rental sector can be better regulated. We’re not talking about rent controls or rent caps but we are talking about protections for tenants.”
Update January 2023
General election 2024 - Labour promise to remove automatic grounds for landlords to gain possession - including rent arrears.
Labour’s shadow housing minister Lisa Nandy has revealed the party’s plans for the private rented sector should it win the next election in 2024. Lisa Nandy told the party’s annual conference in Blackpool yesterday that she would create a Renters’ Charter, giving tenants more rights and safer homes, in the first 100 days of a Labour government.
“For private renters we will tilt the balance of power back to you through a powerful new renters’ charter and a new decent homes standard – written into law,” she told delegates.
Nandy’s housing charter is expected to include an end to automatic evictions for rent arrears and no-fault evictions, the right for renters to have pets, to make reasonable alterations to a property, and introduce a four-month notice period for landlords.
23rd September 2022
Conservatives now call for their own holiday let registration scheme
The conservatives did not support the Labour Bill below but have now commissioned their own call for information to introduce a registration scheme for short let and holiday properties. The initial call for information ended on 23rd September 2022.
It is notable that many local authority councils are now waiting to see if the government will introduce a Bill to parliament. Press releases for example from Brighton & Hove & Oxford City in recent weeks call for the government to bring in a clear national registration scheme for short lets.
A registration scheme could be introduced quickly, hopefully using a specialist industry body such as Visit England to oversee annual membership for short let properties.
This would stop Labour councils from pushing for a more draconian approach to regulating the sector by introducing such measures as the need for planning permission for short lets. This to many would be an overkill approach to the problem leading to cumbersome council run licensing schemes, planning applications and increased costs to councils and operators.
6th May 2022
Short - term and Holiday-Let Accommodation ( registration ) Bill
A bill introduced by the Rt Hon Karen Buck ( Lab) would like to bring in compulsory registration and licensing of all short lets and holiday lets in England, her bill reached its second hearing on 6th May and is likely to be passed within this parliamentary session.
A licensing scheme for all airbnb type / holiday lets does seem entirely reasonable and is far more preferable than having to obtain planning permission for a short stay or holiday let use, as is currently being discussed in the Levelling Up & Regeneration Bill which is also proceeding this parliamentary session.
In any event there are two bills currently put to parliament that will bring controls over the short stay airbnb sector.
15/2/22
Restrictions on short-term lettings on the way
Outside London, there is no specific limit on the number of days a property can be let out on a short-term basis. It is up to the local planning authority (LPA) to make a judgement as to whether a letting amounts to a material change of use, for which planning permission must be sought.
Different rules apply to London homeowners. Those who wish to use residential premises for short-term accommodation for more than 90 nights in a calendar year must seek planning permission from their LPA.
Alongside planning rules, in some cases tenancy, lease and mortgage agreements may prohibit or restrict short-term lettings.
In practice this would mean 1000's of leasehold city apartments will no longer be able to operate as airbnb short lets
It's simple - You cannot let out your leasehold apartment on a short stay licence agreement If your lease prohibits it :
- Prohibits running a business from your leasehold apartment
- Prohibits any use other than a ' Private Residence '
Calls for greater regulation of short-term lettings
There have been calls from a range of organisations, commentators and politicians for greater regulation of the sector.
The Government has committed to consult on the possible introduction of a Tourist Accommodation Registration Scheme in England. It intends to publish a call for evidence in early 2022, to assist in developing policy options for the consultation.
2/2/2022
Government white paper confirms Section 21' no fault eviction' will be abolished in UK
The government's long awaited White Paper confirms that a landlord's automatic right to gain possession of their rental property will be abolished. Section 21 ' no fault evictions' will no longer exist and landlords will have to apply to the courts or tribunal to prove they have grounds to remove a tenant, when this statute becomes law.
There are no timings given at this stage.
Many believe that it is has been Section 21 that allowed and underpinned the growth of The Buy To Let Sector encouraging Lenders to enter the market offering finance to landlords, and allowing landlords to keep control of their properties and rental income.
21/1/2022
All Scottish Airbnb Short Stay Properties Must Obtain Licence By 2023 & 2024.
Councils will be given powers to ensure short-term lets are safe and meet the needs of their local communities under legislation laid before the Scottish Parliament.
Under the legislation, all local authorities will be required to establish a short-term lets licensing scheme by October 2022. Existing hosts and operators will have until 1 April 2023 to apply for a licence for each property that they operate as a short-term let. All short-term lets in Scotland will have to be licensed by 1 July 2024.
14/1/2022
Government Backs ' Responsible Short Term Letting' Who Will Still Continue To Qualify For Business Rating
Michael Gove, the Levelling up Secretary, has announced new rules that will mean From April 2023 second home owners can only register for business rates if they can prove they let the properties for at least 70 days in a year.
Currently, they are permitted to pay business rates, which are cheaper than council tax, if they make their property available for letting for 140 days in a coming year.
Housing Secretary Michael Gove commented: “The government backs small businesses, including responsible short-term letting, which attracts tourists and brings significant investment to local communities.
“However, we will not stand by and allow people in privileged positions to abuse the system by unfairly claiming tax relief and leaving local people counting the cost.
Receiving a Business Rating is likely to be a future test to prove your property is deemed to have a short / holiday let status.
13/1/2022
Government 'Airbnb' Regulation On The Way In U.K. ?
The government is to launch a consultation on plans to introduce a national register in England for holiday lets which will look at their effect on local housing supply and whether greater compliance with health and safety regulation is needed.
Farron is both the party’s housing spokesperson and MP for a leading holiday hotspot constituency in the Lake District, Westmorland and Lonsdale.
In answer to comments by speakers including Hunters founder and MP Kevin Hollinrake and shadow housing minister Matthew Pennycook that a national register would shed light on how many holiday rentals there are in England, housing minister Chris Pincher revealed that a consultation on the matter is due
“We recognise that a large number of second homes and holiday lets can have adverse effects in some areas, so I will look closely at his proposals and at the points raised by other colleagues,” he said.
“We also do not have the information needed to understand how, and for how long, a property is being used.
“I can confirm that we propose to consult on the introduction of a tourist accommodation registration scheme in England so that we can build an understanding of the evidence and the issues that second homes present, particularly when driven by the rise of online platforms such as Airbnb.
“We will launch that consultation later this year and will begin the process of a call for evidence in the coming weeks.
“We want to look at not just the issue of short-term holiday letting, but the effect that it has on supply. We will also look at compliance, health and safety regulations and the effect of antisocial behaviour and so on.”
A competent registration scheme would weed out leasehold apartments operating without the necessary permissions & insurance in place, so reducing competition for legitimate short stay properties.
A good step for existing short stay operators would be to join the new Visit England Accreditation Scheme. this is a simple entry level scheme showing basic permissions are in place along with health and safety measures for your short stay property.
Want to be one of the winners when regulation enters the market email us to discuss in more detail.
15/11/21
Wales To Consider New Planning Use Status For Second Homes & Holiday Lets.
A consultation exercise will launch in January 2022 to seek views on introducing a new "planning class" for short term holiday accommodation. The change, if implemented, would allow councils to designate specific "problem" areas where planning permission would be needed if any buyer planned to use a property as a second home or a short term let.
The change could be introduced from next summer.
20/9/21
Ministry Of Housing Renamed Department Of Levelling Up, Housing & Communities.
The Ministry of Housing, Communities and Local Government has had its name changed to become the ‘Department for Levelling Up’ under Michael Gove‘s leadership.
Mr Gove will head up the Department for Levelling Up, Housing and Communities, a role that will see him responsible for delivering “improvements to every part of the UK”, Downing Street has said.
Mr Gove said: “I’m thrilled that the PM has asked me to lead the levelling up agenda, the defining mission of this Government.
“With a superb team of ministers and officials in a new department, our relentless focus will be on delivering for those overlooked families and undervalued communities across the United Kingdom.
“We have a unique opportunity to make a real difference to people’s lives.
So the message is loud and clear, the government's priority is to kick start their levelling up agenda, knowing if they fail to convince the electorate, that the Conservative Party will very likely fall from power at the next general election.
Importantly Housing will be seen very much as a major part of the levelling up agenda.
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