Government plans to limit holiday lets with new regulation

The government has announced new rules to limit the number of holiday lets and encourage more long-term renting.

Read on to find out what’s changing, why the government is clamping down on short-term lets, plus how housing organisations have reacted to the new measures.

What are the new regulations for holiday home owners?

The new rules, due to come into force in summer 2024, will see councils given powers to require planning permission for new holiday lets.

There will also be a national mandatory regulation scheme introduced so local authorities can keep track of the number of holiday lets in their area.

Announcing the plans, Secretary of State for Levelling Up, Housing and Communities, Michael Gove, said: “We know short-term lets can be helpful for the tourist economy, but we are now giving councils the tools to bring them under control so that local people can rent those homes as well.

“These changes strike a balance between giving local people access to more affordable housing, while ensuring the visitor economy continues to flourish.”

What else do holiday let owners need to be aware of?

The government says that existing holiday lets will automatically be reclassified, meaning their owners won’t need to apply for planning permission.

And if you want to let your main property as a holiday home, you can do so for up to 90 nights a year without planning permission.

If you want to turn a property that isn’t your main home into a holiday let, a new planning use class will be introduced.

Another part of the new planning system will be the introduction of associated permitted development rights. This will allow properties to be changed into holiday lets, or from holiday lets back to residential properties.

However, local authorities will be able to require full planning permission if they think it’s necessary.

It’s important to note that the new measures affect holiday lets only, and won’t affect hotels, hostels, or B&Bs.

Why are the new rules being introduced?

The government says it’s trying to reduce the number of holiday lets so people can afford to live in their own community. The new regulations follow the recent Spring Budget announcement that the furnished holiday lets tax system will be abolished from 2025.

More than 35,000 privately rented homes have been turned into holiday lets since 2019, according to campaigning organisation Generation Rent. A lower supply of long-term rental homes causes average rents to grow due to increased competition among tenants.

The government says that limiting the impact of holiday lets will prevent a ‘hollowing out of communities’, making it easier for people to find somewhere affordable to buy or rent.

Meanwhile, the national register of short-term lets is designed to help local authorities understand their housing markets and monitor compliance with health and safety regulations.

Reaction: calls for holiday let licensing on top of new regulations

Although the government’s plans have been welcomed by many, Generation Rent says more needs to be done to control holiday lets.

“The government must introduce local holiday let licensing schemes, which could give councils proper oversight of how many homes in their area can be let out as short-term lets based on local need,” said Ben Twomey, Chief Executive of Generation Rent.

“This should include local caps on the number of holiday lets that can operate, along with tax changes that take mortgage interest relief away from holiday lets.”

Rachael Maclean, the Labour MP for York said: “There is also now a huge risk that there will now be a flurry of new holiday lets, as investors scramble to snap up remaining properties before controls come into force.”

In response to the new measures being announced, Airbnb said that the average host on its platform makes £5,500 a year from letting their property.

Amanda Cupples, Airbnb’s General Manager for the UK and Northern Europe, said: “As living costs continue to bite, hosting on Airbnb is an economic lifeline that is helping people to pay their bills and afford the things that are important to them.

“When holidaymakers make the decision to book an Airbnb, it’s local families, businesses and communities that benefit.”

How do you feel about the government’s plans for holiday let regulation? Let us know in the comments below.

Conor Shilling

Conor Shilling is a professional writer with over 10 years’ experience across the property, small business, and insurance sectors. A trained journalist, Conor’s previous experience includes writing for several leading online property trade publications. Conor has worked at Simply Business as a Copywriter for three years, specialising in the buy-to-let market, landlords, and small business finance.

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