Landlords Association Recent Landlord News Does the Airbnb industry need to be regulated? 

Does the Airbnb industry need to be regulated? 

Does the Airbnb industry need to be regulated?Airbnb contributes to spiralling rents, higher property prices and a social nuisance, for some residents. 

The Scottish Government has already introduced a licensing scheme, set for spring 2021. Councils in Scotland will be able to regulate ‘holiday-style’ lets where the Council, decide it’s best for local communities. In ‘control areas’, landlords will require planning permission, to change the use of whole properties, for short-term lets.

Airbnbs have jumped from 18,000 to 77,000

The Airbnb sector has seen an enormous growth year on year. London is the largest market; Airbnbs have jumped from 18,000 to 77,000 in the last five years.

According to an Arla report, 3 per cent of landlords have switched to short-term lets. The 3% equates to 46,000 properties unavailable for people looking for a home. However, in London, that figure rises to 4 per cent.

New legislation to protect tenants in the PRS sector and tax changes in recent years was cited by 38 per cent of landlords as the reason they switched to Airbnb. 

Many landlords may not have considered the implications of running an Airbnb and the levers the Government may use;

  1. Planning permission for change of use 
  2. The property could be assessed for business rates, rather than council tax
  3.  The treatment of income from the property for VAT and tax relief purposes is different.

Section 44 of the Deregulation Act 2015 made it unlawful for homes in London to be used as short-term lets for more than 90 days a year without planning permission. 

Currently, councils outside of London can decide if the extent and nature of short-term visitor lettings within a property amounts to a material change in use. 

Camden council has reported there are at least 7,000 properties in the borough which are used unlawfully as short-term lets. These properties are being used for more than 90 days a year, ignoring the legislation.

Airbnb for some residents can be a social nuisance. MP Caroline Lucas is one of the latest to back calls for a register saying it was entirely unacceptable for residents to have to endure noisy parties in rented flats every weekend. As things stand, councils do not know who the hosts are.

“The housing, communities and local government minister in the House of Lords, Viscount Younger, has made clear in a recent parliamentary answer that the government is not planning to establish a register of short-term lets,” he points out.

Housing minister Kit Malthouse, confirmed last year, the Government would not intervene to regulate the use of Airbnb in the UK. He said that all landlords, who let accommodation, on a short-term basis, must “do so, responsibly and in accordance with the law”.

Source: British Landlords Association

Author: Helen Cartwright

Date: 21st of February 2020

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