Labour's Short-Term Let Crackdown: New Rules and Concerns Emerge

Labour is advancing plans to regulate short-term lets in England, a move that could significantly impact the rental market. The proposed measures include granting local councils the authority to designate areas where holiday lets would require planning permission and introducing a mandatory national register for short-term rentals.

A Ministry source revealed that the registration scheme would be implemented "as quickly as possible." This initiative follows similar measures already in place in Wales, Northern Ireland, and Scotland, where varying degrees of regulation exist for short-term lets and second homes.

The short-term rental sector has experienced substantial growth in recent years, with over 223,000 active Airbnb listings in the UK as of 2019. This surge has contributed significantly to the UK economy, with the sharing economy, including short-term rentals, adding £15 billion in 2015 alone.

However, industry experts have expressed concerns about the potential consequences of these new regulations. Andy Fenner, chief executive of the Short Term Accommodation Association (STAA), warned that a locally-run scheme could lead to confusion and inconsistency. He stated, "We are very concerned that the registration scheme is not going to be national. We're concerned that it is going to be introduced either by county, region or council."

The UK tourism industry, worth over £100 billion annually, could be significantly affected by these changes. With over 30 million domestic overnight trips annually and an average stay of 7 nights for international visitors, the impact on both local economies and the broader hospitality sector, which accounts for about 10% of UK employment, could be substantial.

"Evidence from the Scottish B&B Association suggests that 67pc of its members say that the cost of the short-term let licensing has impacted their business revenue and affected their viability as businesses."

The Scottish experience serves as a cautionary tale. Since the introduction of short-term let controls in Scotland in October 2023, only 290 full secondary letting licenses have been granted. Miles Briggs, a Conservative MSP, criticized the scheme's implementation in Holyrood, describing it as "disastrous" and expressing concern about its negative impact on small businesses.

As the UK government seeks to balance the benefits of tourism with local housing needs, a challenge it has grappled with since 2018, the proposed regulations aim to give councils greater oversight and control of housing in their areas. However, the potential for unintended consequences, such as the surge in black market listings observed in Scotland, remains a significant concern for industry stakeholders and policymakers alike.