Councils have been raising concerns about the impact of unregulated growth in the tourist accommodation sector for some time. We welcome Government’s exploration of the issue and urge Government to take meaningful action to rebalance the impacts of this growth industry.
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 331 of the 333 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 and urge 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.
This lack of direct evidence is not a reason to do nothing, but emphasises the need to develop, as a minimum, a registration scheme to ensure that councils and emergency services are aware of how many of these properties are located in their areas and can start recording incidents related to them. However, we believe there is sufficient qualitative evidence to go beyond this as a first step and introduce a more empowered licensing scheme, coupled with change of use planning powers, to take immediate action to better balance housing and accommodation provision within high-risk areas.
We therefore recommend that a universal registration scheme (Option 4) should be implemented, with local councils having the discretion to introduce a licensing scheme (Option 5). This will have the maximum benefit for communities and allow councils to unlock the growth potential of the whole visitor economy in a sustainable way. This approach is also in keeping with the Government’s commitments to Levelling Up and Devolution.
Questions 3-8: Impacts of growth in short-term lets
We believe there is substantial anecdotal evidence to show that there are issues arising under all of the areas identified in the consultation, as well as in some additional areas.
Our members have identified a number of key issues resulting from the proliferation of short-term lets, including:
- increasing house prices beyond those affordable to local residents
- increased evictions of tenants to convert to more profitable short-term lets, including those vital to running the visitor economy such as chefs and hospitality workers, undermining the ability of the local visitor economy to recruit and retain staff
- increased reports of noise nuisance from ‘party houses’ which requires a reactive and costly response from the council
- increased congestion and road-blocking from roadside parking, which can restrict access for emergency services
- increased requirements for waste collection services
- reputational risks for the destination due to poor quality or mis-advertised properties
- a failure of many businesses to be correctly registered for business rates
- an unequal playing field between different parts of the visitor accommodation sector, disadvantaging existing businesses.
Question 10: What do you consider to be the costs and associated burdens of these options, who would bear the costs and how might they be mitigated?
Where any new powers are introduced, these are best devolved to councils that are licensing authorities, where they will sit alongside existing mechanisms for delivery and enabling financial efficiencies to be secured. However, local government must be fully resourced to deliver these new powers under the new burdens doctrine, and should be permitted to set local fees which reflect the true cost of protecting and managing their communities, and growing their local visitor economy.
The schemes identified below in response to question 11 are all established regulatory schemes, developed and adapted in consultation with businesses to have maximum impact with the minimum necessary burden.
While there will be some new burdens related to this, the overall impact on the local visitor economy and the community will have many positives to outweigh this burden, unlocking growth.
- improved competition between businesses as a result of a level playing field
- a better quality and consistent offer for visitors with assurances of meeting industry standards and health and safety requirements
- enabling the workforce to live affordably and locally, maximising productivity and reducing congestion on the roads
- council services like waste collection and parking can be directed to support the extra visitors, avoiding negative experiences that prevent repeat visits
- the newly regulated businesses will contribute to the visitor infrastructure and destination management of the place, allowing coordinated and more rapid managed growth
- communities will experience fewer negative impacts from the visitor economy and will therefore be more welcoming and supporting of this part of the economy.
Question 11: Do you have any insight or evidence on the impact of schemes that are already running, or approaches taken elsewhere in the world?
Member councils have identified a range of existing regulatory and licensing models which could be adapted to better manage short-term lets. The LGA would be happy to convene a working group of regulatory officers to support the Department for Digital, Culture, Media and Sport (DCMS) as they identify the best tools to respond to these issues.
Our members have highlighted the importance of using both planning and licensing powers to tackle this issue, aligning with recent moves by the Department for Levelling Up, Housing and Communities (DLUHC) to manage the number of second homes in an area. We believe that a change of consent should be required to offer accommodation primarily for rent to visitors. The Levelling Up and Regeneration Bill offers another opportunity to do so, and an amendment (NC29) has already been tabled on this issue.
Comparable regulatory options identified include the additional licensing scheme for houses of multiple occupation, which would allow local councils to identify the area over which the licensing scheme would apply, allowing for precise targeting of interventions to support communities impacted.
The existing approach for Caravan and Campsites is outlined in the Public Health Act 1936 and the Caravan Site and Control of Development Act 1960. This sets standards for health and safety and operation, and there is not always a charge for this licence, and this has the benefit of already being familiar to parts of the visitor economy.
Other models to explore include that for taxi and private hire vehicle licensing, where obligations on operators to ensure arranging and fulfilling bookings, employing and vetting licensed drivers and vehicles, responding to customer complaints, and maintaining records of every booking they receive could be an equivalent to placing an obligation on accommodation platforms to conduct a more rigorous assessment of the safety measures and insurance cover taken by listed properties.
There could be a requirement for this to be shared with licensing authorities, ensuring that the burden of regulation was borne by those best equipped to do so, and minimising the burden on small scale businesses and individual entrepreneurs.
Our key learning from the implementation of all these schemes is that there needs to be meaningful time to roll out the new scheme. This includes extensive engagement with the regulatory authorities who will be responsible for delivery. We recommend that at least 12 months are allowed to implement the scheme and fine tune it.
Question 13: Is there any other information related to short term lettings and/or the issues already raised in this call for evidence that you wish to draw to the government’s attention?
We recognise and applaud the positive conversations that platforms like Airbnb have had with individual councils, but this is an inefficient approach that leads to a postcode lottery for businesses. A national scheme implemented locally will ensure every area remains competitive.
It is clear that the current lack of any 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 it. For instance, fire call outs will not record the type of property so it is not possible to assess an increase of fire risks from these properties, although anecdotally there is this impact. The same is true for noise nuisance calls, while the impact on local housing availability is even more indirect and difficult to measure.
This lack of direct evidence is not a reason to do nothing, but emphasises the need to develop, as a minimum, a registration scheme to ensure that councils and emergency services are aware of how many of these properties are located in their areas and can start recording incidents related to them.
However, we believe there is sufficient qualitative evidence to go beyond this as a first step and introduce a more empowered licensing scheme, coupled with change of use planning powers, to take immediate action to better balance housing and accommodation provision within high-risk areas. This scheme would need to be closely monitored for impact and assessed over two to three years to allow an iterative approach to refining the regulation.
Senior Adviser – Culture, Tourism, and Sport
Phone: 020 7664 3143