10,000 rental homes in London could be lost to short lets

London’s rental market is under threat, warns Propertymark, as landlords look to exploit a deadline and convert their rental properties into short-term lets ahead of new regulations.

That’s because new rules will see new short-term lets having to register and meet planning regulations – and they could be stopped if a council decides there are too many in an area.

And one council leader is warning that up to 10,000 properties could be moved into the short lets sector – resulting in higher rents for PRS tenants.

However, though the Chancellor Jeremy Hunt last week removed tax relief enjoyed by the sector that will affect a landlord’s profitability.

‘Exodus of landlords could well be detrimental’

Propertymark’s chief executive, Nathan Emerson, said: “There are already great concerns regarding supply levels across the whole of the UK in the private rented sector so a further exodus of landlords could well be detrimental.

“Some tourist hotspots are being majorly affected by an increase in short-term lets as tenants are struggling to find a property that they can rent in the long term.”

His warning comes after Westminster City Council voiced its concerns that landlords might exploit legal loopholes that enable them to convert homes permanently into short-term lets and beat the upcoming deadline.

Automatically qualify certain properties as a new class

The council’s leader Adam Hug expressed his fear that the government’s proposal that would automatically qualify certain properties as a new class could see more than 10,000 homes being moved out of London’s PRS.

Mr Hug said: “The Budget did offer the prospect of some tightening up on the rules around short-term lets, which we welcome.

“However, the reality is the Government’s main plans contain a generously sized escape hatch for short-term lets [for] landlords who want to escape any planning regulation at all.”

He added: “Our fear is that this will effectively rob the private rented sector of more than 10,000 rentable homes in Westminster.

“The real losers in this will be people looking to rent properties who now have even less chance of finding a home.”

The ‘misery’ that short term lets bring

Mr Hug also highlights the ‘misery’ that short term lets bring to many areas in London with noise and rubbish.

He told MyLondon: “We receive constant complaints from residents for whom this is the reality of a short-term let market out of control.

“As the popularity of short-lets reaches pre-pandemic levels, we need a thorough overhaul of the law – not a cosmetic tinkering which gets us no further on.”

Westminster says it has issued 86 planning contravention notices to suspected short-term lets since the beginning of the year.

There are also 500 active investigations underway currently.

Will help prevent the ‘hollowing out’ of communities

The Department for Levelling Up, Housing and Communities said the planned changes will help prevent the ‘hollowing out’ of communities and deal with antisocial behaviour.

Also, a new mandatory national register for short let landlords will give councils the information they need about short-term lets in their area.

The department points out that these lets contribute a big chunk to the UK’s visitor economy, and bring choice and flexibility for tourists.

Under the new rules, homeowners will be able to let out their own main or sole home for up to 90 nights in a year without planning permission.

The proposed planning change will see a new planning ‘use class’ being created for those short-term lets that are not a sole or main home.

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