Short term lets are threatening the PRS

9:54 AM, 28th October 2022, About 2 years ago 3

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The number of short-term lets (STLs) has grown steadily in many areas of the UK over the past four years – and could threaten the PRS, a survey reveals.

The report from Propertymark highlights that the recent pandemic helped to fuel the rise in short let properties because many people decided to holiday in the UK rather than risk travel abroad.

However, the report, ‘The impact of short-term/holiday lets on UK housing’ reveals numbers have been falling since – but are now steadily rising once again.

The survey of Propertymark members also highlights the localised nature of the issue, with 76% of agents operating in tourist hotspots reporting an increase in the number of STLs over the past four years.

This dropped to only 33% of agents operating in non-tourist hotspots.

Proliferation of short-term lets

Propertymark has been outspoken in recent years over how the proliferation of short-term lets risks reducing the size of the private rented sector.

An increase in short-term and holiday lets also reduces the number of homes for people to purchase which increases house prices as supply is reduced.

There have been several recent government consultations on the matter with Scotland introducing new legislation that will see STLs being licensed in some local authority areas.

Agents say the solution to the problems being created by short let properties is in more home building in the private and social sectors.

They say an increase in supply would ease tension on the PRS and limit house price inflation so that local first-time buyers can get on the ladder.

Limit the number of STLs

Regulation which could potentially limit the number of STLs and ensure a level regulatory playing field with the PRS is a close second to this solution.

Timothy Douglas, Propertymark’s head of policy and campaigns, said: “The issues surrounding short-term lets are back in focus as housing availability and affordability is high on the agenda.

“Feedback from our members shows that the issue is complex, very localised and is having a significant impact on the use and supply of housing across the country.”

He added: “Both the Scottish and Welsh Governments have taken action to address the issue and for England, the vast majority of our members support the introduction of a licencing scheme with physical checks for short-term let premises as well extending the current health and safety requirements and tenant protections to short-term lettings.”

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Comments

Morag

11:44 AM, 28th October 2022, About 2 years ago

The STL legislation is now live in Scotland, and makes HMO requirements look like a walk in the park. It affects every local authority, but the legislation is sufficiently vague that most local authorities haven't yet got their act together, and fees are ranging from around £300 to £1800+. In Edinburgh planning permission is necessary for all, and properties with shared entrances are being routinely refused in every case, even with support from neighbours. Other authorities are also toying with PP but can't decide what type of application it requires, so owners are being given conflicting or changing information, and being charged anywhere from £100 to £1800 for permission before they can even apply for a licence which is likely to be refused. Then there are the safety certifications and property modifications involved to meet the requirements, even for the occupier of a two bed property who occasionally lets their spare room for a bit of extra cash. People are pulling out their hair trying to jump through all the hoops and cope with malfunctioning online licencing application processes. Many are giving up and either selling or leaving their property empty for family use only. Few are prepared to switch to longterm letting, many having already been driven out of that sector. Goodness knows what next year's tourist season will look like, and it's doubtful how helpful it will be for renters or home buyers. Time will tell.

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NewYorkie

11:54 AM, 28th October 2022, About 2 years ago

These areas are reliant on the tourist income. Remove it, and unemployment and decay follows.

However, I agree STLs should be on a taxation par with BTL e.g. S24.

Meantime, I bought a house in Feb 20, which I extended and refurbished throughout, with the intent to put it on the STL market. The demand is high, but the spectre of regulation and taxation has put me off. I won't long let; had enough. I will probably sell and realise the £150k profit.

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Morag

9:30 AM, 29th October 2022, About 2 years ago

Reply to the comment left by NewYorkie at 28/10/2022 - 11:54
Don't you think that BTLs should be on a par with STLs and every other business? In other words, S24 should be reversed. A lot of anti-landlord legislation is going to have to be reversed to finally turn around this unfolding disaster for tenants, tourists, and ordinary people's livelihoods alike. It could take a long time though before governments think of a way to save face and put a spin on the reversal of these measures without enraging the ill-informed campaign groups who pressured them into enacting them in the first place.

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Short term lets are threatening the PRS

Proliferation of short-term lets