London boroughs urge Ministers to crackdown on illegal holiday lets
Illegal rental activity is ‘undermining housing availability and community stability across the Capital’ according to new report.
More than half of London’s 117,000 short-term holiday lets are illegal, according to new research and has prompted calls for the Government to tighten the rules to enable local authorities to better identify and prosecute those that flout the rules.
The research was carried out for a report by Central London Forward, a partnership of inner London boroughs, and says Westminster City Council leader, Adam Hug (pictured), over 50% of short-term rental properties in the capital are exceeding the 90-day annual letting limit.
And the number of short-term lets is growing rapidly. In 2015, there were fewer than 30,000 in London but there are now 117,000, an increase of nearly 400%.
Speaking at the Centre for London think tank’s annual housing summit, Hug claims his borough is at ‘the epicentre of the problem’ with more than 16,000 short-term lets concentrated in specific neighbourhoods, 9,000 of which are illegally let.
This concentration has a profound effect on our local communities.”
He says: “This concentration has a profound effect on our local communities, which can hollow out long-term residents, make neighbours subject to significant noise disruption and fly-tipped waste.”
The report recommends that rental platforms be legally required to ‘share individualised, unit-level data with local authorities’ and advocates the implementation of a mandatory national registration scheme.
Hug explains that holiday let websites frequently “Mask where the properties are, putting it on a street a couple of roads away, and not being clear what building it’s in to circumvent enforcement measures.
“It means that hard-pressed planning enforcement teams are really struggling to build the evidence base to get the court to enforce the 90-day rule. In order to better regulate the market, and to empower local authorities, we really do need national Government to step up.”
Tom Copley, Sir Sadiq Khan’s Deputy Mayor for Housing, has endorsed the report’s findings, calling current regulations ‘completely inadequate’ since boroughs, he says: “Have an enforcement power that in practice they are unable to exercise.”
With 65,000 homeless households in temporary accommodation across London and local authority budgets under strain, he stresses the urgency of getting these illegally operated properties back into the long-term rental market.
Robust action
The report proposes enhancing local authorities’ regulatory powers over holiday lets, including mandatory data disclosure requirements, more robust licensing schemes that could restrict illegal short-term lets in designated zones, as well as tax changes to make short lets less attractive.
A Government spokesperson has acknowledged the concerns and has confirmed plans to introduce a registration scheme and also pointed out the recent abolition of the furnished holiday lets tax regime.
However, local authorities say they want more robust action that addresses what they are calling ‘a significant crisis of illegal rental activity that undermines housing availability and community stability across the Capital’.
The number of holiday lets has boomed because landlords are responding to the fact that the long-term rental market has been made so unattractive, and that’s before the completion of the Rental Reform Bill. The notion that making the short term letting market less attractive is going to magically generate lots of accommodation suitable for homeless households in the borough of Westminster, of all places, is just fantasy.
Private landlords are not *obliged* to rent out their properties, or indeed own property at all, just because local authorities wish it. Private landlords and their private assets are not a branch of social services. If these local authorities want more cheap accommodation for homeless citizens, they need to incentivize private landlords and developers to provide it, not punish them at every opportunity. They should be appealing to central Government to make the PRS *more* attractive for landlords, not perpetually ask them to wreck it and make long-term renting unviable as a business. And they should be using their own extensive powers more wisely, such as radically changing their planning and S106/CIL rules to encourage the conversion of underutilised offices and other buildings into social housing, and seek in all areas of their operations and powers to make it easier for the PRS to flourish and deliver reasonable-quality housing at scale. Then one day, eventually, central Government and the Treasury might come to see social housing as an asset worth investing in, not a burden, and recognise that it is ludicrous and fiscal nonsense to starve social housing of capital investment whilst spending billions of taxpayers’ money every year on housing benefit and the housing element of Universal Credit to private landlords.