LGA response: Consultation on a registration scheme for short-term lets in England, June 2023

The LGA is the national membership body for local authorities and we work on behalf of our member councils to support, promote and improve local government. Our core membership comprises 315 of the 317 councils in England and includes district, county, metropolitan and unitary authorities along with London boroughs and the City of London Corporation.

Our Associates include fire and rescue authorities, police, fire and crime commissioners/police and crime commissioners, national park authorities and town and parish councils via the National Association of Local Councils (NALC)’s corporate associate membership.

Our members are responsible for shaping and managing our communities, with responsibilities covering environmental health, licensing and regulation, fire safety, housing, highways and planning services. All of these services support, and are affected by, the local visitor economy and accommodation providers.

We have engaged with all our members and conducted more in-depth conversations with areas that have identified this as a particular challenge for their communities. This is a summary response outlining areas of consensus and key areas of concern for local government in their role as place-shapers. Many of our members will also submit their own responses outlining their specific local context and associated evidence base.

Local government has been raising concerns about the impact of unregulated growth in this sector for some time. We welcome Government’s exploration of the issue, including this consultation which responds to recommendations put forward by our members. We look forward to supporting Government to take meaningful action to rebalance the impacts of this growth industry.

It is a national issue, with the impacts of short-term letting found across the country. However, it is not an issue in every council area, with some councils seeing little growth and others reporting growth of between 30-52 per cent in short-term lets. Our members report particular challenges in visitor ‘honeypots’ destinations such as coastal areas, particularly in the South West and East of England, as well as in core and key cities.

We believe this indicates the need for regulation that allows local discretion and implementation, ensuring that the response is proportionate for those places without significant challenges while also enabling those places with significant impact on their communities to take action.

Members have also indicated that it is important to not discourage those lets which provide flexibility to people who only occasionally let a spare room. This suggests a tiered approach based on risk and impact of the short-term let, avoiding the need for excessive bureaucracy or red tape that will unfairly hold back smaller businesses.

It is clear that the current lack of registration and regulatory requirements for these businesses makes it hard to quantify and assess the scale of impact. While there is extensive and comprehensive anecdotal evidence of the growing impact of this type of accommodation, there are few opportunities to record and quantify the impact on communities and services.

We have drafted this response alongside our response to the DLUHC consultation on introducing a new use class for short-term lets. It will be vital that both the planning use class changes and the registration scheme are introduced alongside each other, as neither will be effective without the other mechanism.

Question 1: Which high-level approach to the registration scheme do you prefer?

• a) An opt-in scheme for local authorities, with the framework set nationally.
• b) An opt-in scheme for local authorities with the framework set nationally, and a review point to determine whether to expand the scheme to mandatory.
• c) A mandatory national scheme, administered by one of: the English Tourist Board (VisitEngland), local authorities, or another competent authority.

The LGA and its members support option b), reflecting that this is not a priority issue in every council area and that implementing it would introduce a financial and resource burden on those areas where short term lets are not a significant part of the housing or accommodation supply.

We also believe that there should be a review point which includes consideration of whether a licensing scheme would be more appropriate, given that the registration scheme will introduce no new regulatory powers to take action against ‘bad actors’ in the sector.

However, we recognise there may be a case for improved and comprehensive data at the national level, as set out in option c). Were this to be adopted, appropriate funding and resources would need to be provided to those local authorities where the registration scheme would not have sufficient income to be self-funding.

Question 2: Who should be responsible for administering the registration scheme?

• a) Local authorities

Local authorities should be responsible for administering the registration scheme. They have existing responsibilities under other regulatory schemes, including houses of multiple occupations, taxi, and alcohol licensing.

Local authorities are tasked with management of their place and are therefore best placed to make use of the information gathered through the registration scheme to influence their strategic policies, and share information with enforcement and business support teams.

No national bodies have comparable existing responsibilities, and it would be costly, time-consuming, and ultimately less effective, for a national body to take on this role. There would also be no mechanism for transferring the income from the registration fee between the national body operating the registration scheme, and the enforcement bodies who would be taking action. Without funding from the registration fee, it will not be possible to pay for any enforcement action, rendering the scheme impotent.

Question 3: Should there be an analogue version of the registration scheme which would run in parallel with the digital one?

No. This accommodation sector advertises almost wholly through its digital presence. In the rare instance where this may not be suitable, access through computers in public libraries or a printed copy could be requested.

Question 4: Should the platforms require a valid registration number in order to list a short-term let?

Yes. This is essential for enforcement and management purposes, as many properties appear on multiple booking sites. The registration scheme will not function without this requirement.

Question 5: Should the registration number be displayed in any advertisement or listing of a short-term let?

Yes. This is essential for enforcement purposes and also for customer confidence.

Question 6: What should the ‘unit’ of registration be?

a) Owners

b) Premises/dwellings or part of a dwelling

c) Individual accommodation units within a premises/dwelling

d) Other (please specify)

Given that a significant driver for the introduction of this scheme is to understand the impact on housing supply, we believe it is necessary for individual accommodation units to be registered where they can be let out separately. For instance, individual flats in an accommodation block.

A homeowner letting out bedrooms separately should not be caught within this definition.

We believe that an owner would provide too imprecise a point of reference given that some large-scale businesses operate in this sector. However, it should be possible to connect various registered premises to an owner, to assist with any enforcement issues.

Question 7: How should the following types of accommodation be treated in respect of the registration scheme?

Caravans on sites or any site which accepts motorhomes or campervans or any other vehicle providing accommodation; Treehouses; Mountain bothies; Shepherd’s huts; Cars; Motorhomes; Glamping; Yurts; Boats inc. houseboats, canal boats; House swaps.

The list of exemptions looks sensible. The majority of the exemptions do not form part of the regular housing supply, while the remainder would fall under separate regulatory schemes, such as those for holiday parks.

Question 8: The following are not considered to be within scope of short-term lets for the purposes of this paper. Do you agree with this list of exemptions?

• a) licenced hotels and B&Bs and self-catering properties on their premises,
• b) women’s refuges,
• c) homeless hostels and other temporary accommodation for homeless people,
• d) accommodation for asylum seekers,
• e) child or adult care homes and other council premises,
• f) student halls of residence (whether used by students or others),
• g) hospitals,
• h) prisons, and
• i) supported housing

We agree that this list of exemptions from b) – i) is appropriate for the purposes of a registration scheme. However, we note that it is desirable for hotels, B&Bs and short-term lets used for holiday accommodation to fall under the same regulatory regime, to ensure a fair and competitive market across all parts of the sector.

Question 9: Are there any other types of short-term accommodation that you think should be exempt from a requirement to register? If so, please specify.

No.

Question 10: How long should registration be valid for?

We believe registration should last for as long as the premises is used as a short-term let. However, there should be requirements to update the required documents on an annual basis in line with the expiry dates for gas and fire safety certificates, and an annual fee (lower than the original registration fee) to maintain the listing.

This approach ensures up to date information for customers and enforcement officers, while reducing the administrative burden on businesses and the regulatory authority. It is broadly comparable to other registration and licensing schemes.

As we believe that reporting on the number of days let per calendar year should form part of the registration scheme, we do not feel that the five years in place for licensing a house of multiple occupation is appropriate for this scheme.

Question 11: What information should be collected? (Please tick all that apply)

The person responsible for the registration should confirm each year whether the information that was provided at initial registration is still accurate. The information should be presented to the person registering as a prompt to review the information with a positive confirmation required.

Question 12: Which regulations should be satisfied in order for a property to be registered? Please tick all that apply.

We believe the following regulations should be met as part of the scheme.

• a) Gas safety
• b) Boiler safety
• c) Fire safety
• d) Electrical safety
• f) Planning [where relevant, subject to DLUHC planning use class consultation]

Question 13: In the context of compliance and enforcement, what should be the starting point of the registration scheme? Please tick all that apply.

• b) Light touch inspections of documentation uploaded as part of the registration process based on a % of all properties to be spot checked at random on an ongoing basis.
• d) Light touch physical inspections of short-term lets based on an intelligence or risk-based approach on an ongoing basis.

A combination of spot checks on documentation alongside intelligence-led physical inspections would together form an effective regulatory regime. However, there will need to be effective penalties and enforcement powers introduced as part of the registration scheme.

Self-certification should be avoided as an approach, as it will not provide consistent or robust data, impacting on enforcement ability and consumer confidence in the scheme.

Question 14: What issues do you think should incur a penalty? Please tick all that apply.

All identified issues should incur a significant financial penalty.

Question 15: What penalties do you think would be appropriate? Please tick all that apply.

Financial penalties should be significant enough to act as a deterrent. We note that in Germany, fines for breaches of this kind are set at €1 million.

Penalties should be on a sliding scale with trading without a registration number being regarded the most serious. Penalties should rise in scale depending on the severity and number of previous infractions.

Persistent, serious and frequent infractions should result in the owner being barred from running short-term lets.

Question 16: Should there be a flat fee per owner, or a sliding scale attendant with the number of units being let? (See also question 6 on unit of registration)

We suggest a sliding scale of fees based on the size of unit.

Question 17: Should there be an annual fee to be in the registration scheme, regardless of the frequency of renewal asked in question 10?

Yes, set locally by the registering authority. This will be critical to ensuring there is funding available for enforcement and regulatory functions related to the scheme.

Question 18: Should the platforms and/or other areas of industry contribute to the set up and running costs of the scheme?

It will be important that booking platforms invest in their offer to allow for effective information-sharing with regulatory bodies and to publish registration numbers. However, we do not believe they should be required to directly contribute to the establishment of the scheme.

Question 19: Do you think that any of the data captured should be shared at all beyond the competent authority administering the scheme, as determined in Question 2?

Yes.

Question 20: If you answered ‘Yes’, which types of organisations should have access to the data collated by the registration scheme? Please tick all that apply

Only those bodies responsible for gathering the data and enforcing the scheme and the law should have access to the detailed/individualised data.

Data should not be sold for commercial purposes but the aggregated/anonymised data would be of significant use to others including central government for policy development and academics.

Question 21: Should there be a de minimis below which a property can be let for without the requirement to register?

We believe there should be a 90-day de minimis which is in line with existing regulation for London. This allows for individual owners to let their property while they are away, such as during school holidays, while ensuring overall provision and supply is managed.

We are also not concerned with registering the let of bedrooms within a dwelling where the owner is present. These properties cause minimal problems.

Question 22: Are there any other issues that you think the government should be considering as part of its work to develop a short-term let registration scheme?

The registration scheme must be introduced alongside the proposed planning use class if it is to be effective. Without the accompanying planning powers, enforcement options will be limited.

As the available information on existing short-term lets is limited, although they are uncontestably a problematic issue, it is very important that a review date is committed to at the launch of the scheme and that data collection and evaluation methods are built in from the start. This is because there are variety of accommodation providers, as illustrated by the extensive lists of exemptions within the consultation, and it will be important to assess the scheme for unintended consequences or loopholes on parts of the wider accommodation sector.

A full assessment will also need to be made of the impact of the scheme on council regulatory teams, including whether a licensing scheme with more developed enforcement powers is required.

Question 23: Do you have any comments about the potential positive and/or negative impacts that the options outlined in this consultation may have on individuals with a protected characteristic under the Equality Act 2010?

The introduction of this scheme will help protect people with protected characteristics by improving their access to local, affordable accommodation, as local authorities will be better able to manage their housing supply. These groups are disproportionately likely to experience homelessness.

It will also provide protection through ensuring a minimum standard for accommodation, protecting those who may find it more difficult to research and understand quality standards.

Question 24: In your view, is there anything that could be done to mitigate any negative impacts?

N/A.

Ian Leete, Senior Adviser – Culture, Tourism, and Sport

Phone: 020 7664 3143

Email: [email protected]