Westminster Hall debate, Regulation of short-term lets, 12 September 2024

Key Messages

• The LGA has been raising concerns about the impact of unregulated growth in this sector for some time. 
• 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 Southwest and East of England, as well as in core and key cities.
• 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.
• Member councils 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.

Background

• The LGA welcomes continuing progress on the development of the registration scheme for short-term lets, and is pleased to have supported DCMS engagement with councils, allowing them to feed into the developing design.
• We are concerned that the status and progress on the accompanying changes to planning regulation is less clear. While there are mixed views across the sector about whether both changes should be introduced at the same time, we believe that it is important that both measures move forward and are implemented to give councils the full set of tools they need to manage the mix of accommodation provision and balance the needs of residents and businesses.
• However, we do remain concerned that the original plan to allow automatic transition of planning use class would result in a very significant amount of housing being lost permanently to short-term lets, and unavailable for local residents. We would welcome further discussions with government on this point. 

Registration and regulatory requirement 

• Following a consultation on registration scheme for short-term lets in England (June 2023), the LGA and its members showed support for 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.
• The LGA also believes 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. 
• To address the scheme's aim of understanding its impact on housing supply, individual accommodation units, such as separate flats within a block, should be registered if they can be let independently. Homeowners renting out individual bedrooms should be excluded from this requirement. While registering by owner would be too vague, particularly for large-scale operators, linking registered premises to their owners should be feasible to support enforcement efforts.
• The LGA believes that registration should last for as long as the premises is used as a short-term let, with an annual fee to maintain the listing. This ensures up-to-date information for customer and enforcement officers, while minimising the administrative burden. 
• For the registration scheme to be effective, it must be introduced alongside the proposed planning use class, as enforcement options should be set at the scheme’s launch, with built-in data collection and evaluation to address potential loopholes or unintended consequences. Additionally, a full assessment of the scheme’s impact on council regulatory teams is needed, including whether a more robust licensing scheme with enhanced enforcement powers is necessary. 
• The scheme will enhance access to local, affordable housing for people with protected characteristics, who are more likely to face homelessness, by improving local authority management of housing supply. It also ensures minimum accommodation standards, offering protection for those who may struggle to assess quality. 

National permitted development rights

• The LGA has long called for permitted development rights to be urgently revoked as they undermine and weaken the role of Local Plans and local communities in decision-making. Extending these rights to permit the change of use from C3 dwellinghouse to C5 short-term let seems at odds with the premise and purpose of creating a new use class for short-term lets, “to allow for greater local control”, as local authorities and communities will have no say in their location, size and quality.
• Permitted development rights make it easier for businesses to bypass the planning process by reducing the burden of evidence and policy compliance for schemes, but this compromises councils’ ability to manage housing supply at a time where there is a significant shortage of housing and inability to increase supply fast enough to compensate. This shortage is already having a direct impact on the visitor economy with key workers unable to secure accommodation in proximity to where they work. 
• The default in the planning system should therefore be that residential use class and a short-term letting (commercial) use class are wholly different and any movement between those classes should be under the jurisdiction of local planning authorities. These authorities are also the local housing authorities with a comprehensive understanding of local housing needs in proportion to economic needs of tourism.
• Notwithstanding our position that the traditional planning application route to determine change of use should apply across the country, unless devolved legislation exists, making provision for use of an article 4 direction should the government proceed with the new permitted development right will allow those areas most affected to put in place appropriate measures for their communities. We would urge the Government to engage directly with councils who have identified their intention to introduce article 4 directions to remove these permitted development rights in order to understand the type and detail of evidence required to meet the requirements of NPPF paragraph 53. Further, Government should consider delaying the introduction of these permitted development rights for one year to allow local authorities sufficient time to develop and adopt their article 4 directions, as these directions are resource-intensive and require community and business consultation. 
• The LGA does not support the use of permitted development rights as they undermine local authorities planning policies and communities in decision-making. However, if the use class is introduced, it would be desirable to have the simplest mechanism possible to return a short term let to the general housing stock. 

Contact

Elliot Gregory
Public Affairs and Campaigns Advisor
Phone: 020 7664 3059 
Mobile: 07766252833
Email: [email protected]