Holiday Lets Legislation: A Centre Perspective

Torrin Wilkins, Director of the Centre Think Tank, offers his perspective on currently proposed holiday lets legislation

In recent years the holiday let sector has changed almost beyond recognition with the creation of Airbnb and similar companies. It is easy to set up an Airbnb, easy to book one and the number of people doing so is continuing to grow with AirBnB reporting that they saw growth of 19% in the first quarter of 2023 for rooms booked.

This growth has been positive in many respects. The expansion in holiday lets has in many areas also grown the local tourism industries, especially for areas that already have tourist attractions or areas of natural beauty. Tourism can also support local businesses and creates jobs for people in the area.

For consumers Airbnb has made it easier to book somewhere to stay and holiday lets contribute to the UK economy. Overall the average guest travelling with Airbnb spends £100 per day in the UK. 43% of this is spent in the neighbourhoods in which they stay (p.18). It’s clear that holiday lets and platforms such as Airbnb have benefits for the economy. There are, however, clear side effects from rapid and large expansion of the holiday let sector within the UK.

Generation Rent showed last year that 29 homes a day were lost to the holiday lets sector between 2021 and 2022, causing a sizeable impact on the private rented sector in particular and affecting areas where people wanted to live.

Cornwall is one area which has particularly struggled with the number of Airbnbs and second homes in their area. This has led to claims that residents are being “forced out”.

Given that councils have a responsibility to look after those they represent, they should be given more control over holiday lets within their area where they are causing issues. This would not be a ban but would give local areas more controls over holiday lets within their areas.

The bill

Rachael Maskell MP has already put forwards a Holiday Lets Bill, the full name being the Short-term and Holiday-let Accommodation (Licensing) Bill. This would create a licensing system for holiday lets allowing local areas to see the number of holiday lets in their area.

The licensing system would allow local councils to set standards around issues such as noise, safety and nuisance. If these terms are broken then councils would be able to fine or, in more serious cases, remove licences from holiday lets.

This would hand powers down to local councils and, more importantly, to local areas. It would also give them wider powers over properties being licensed in particular areas and the taxes placed on holiday lets. Councils would also be able to restrict the number of days per year properties can be let for. All of these measures allow councils to step in where holiday lets are causing issues in the local area.

Potential alterations

This bill has now had its second reading and may change as it goes through the parliamentary process – though as a Private Member’s Bill it has a limited chance of being made law. In my view there are a number of ways it can be altered to ensure it tackles the issues with the holiday lets sector that have become apparent. First is to replace the ability for councils to revoke licences on any ground to instead allow them to do so based on a set of reasons.

The reasons where councils should be allowed to step in should include where there are more than four holiday let properties in a row on one street or where holiday lets make up a large proportion of the housing stock in the area/percentage of houses in the area. It should also include where regular travel to and from holiday lets is harming the local environment or where holiday lets are deemed geographically unsuitable alongside the other rules in the bill on noise, safety and nuisance.

This would help to reassure that this bill will ensure local councils can keep holiday lets in check where they are damaging the local housing market or where they are causing disturbances. At the same time, it will ensure that this is not used to overly restrict or in effect ban holiday homes in certain areas.

The government are also working on bringing forward a registration scheme for holiday lets and a system of planning controls to limit their spread. The consultations on these proposals closed recently and it is hoped that it will provide a thorough and robust change to the current system and give local authorities a greater say on the number and type of holiday lets that are available in their areas. Although they are positive, the government’s current plans can be improved; under the current plans existing holiday lets would get automatic planning permission – including homes that tenants were evicted from to make way for tourists. This means that thousands of homes could be lost to the sector permanently. Convincing the government to require those already operating holiday homes to seek planning permission may be difficult but it has the potential to allow homes to return to the market, either through sale or becoming private rented homes, and give individual and families more of a chance at finding somewhere safe and secure to live.

To fix the holiday lets crisis there has to be a cross party consensus on what we want out of the growing holiday lets sector. The only way this can be achieved is by recognizing that it isn’t simply a case of someone’s holiday; it’s about someone’s home.


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