The law surrounding short term lets through companies such as Airbnb continues to be an area of concern for landlords and developers and one which requires certainty through primary or secondary legislation as the legal position varies across England.
Since my colleague Rebecca Mushing’s insightful article in June last year, What Regulation is in Store for holiday Lets in England, the legal position on short term lets remains largely unchanged. This article clarifies where the law currently stands and highlights some factors that decision makers might consider when determining whether a holiday let is a material change of use requiring planning permission.
The previous Secretary of State, Michael Gove consulted on and published bold plans for a new Use Class C5 for holiday lets in England in the summer. The new measures would have introduced a new use class for short term let’s not used as a sole or main home. This would mean that a change of use from C3 (dwellinghouse) to C5 (short term lets) would be a material change of use for which planning permission would be required.
The previous government also proposed a new mandatory national register to give local authorities information about short-term lets in their area in order to regulate such lettings.
Is there a Planning Use Class for short term holiday lets?
The short answer is no in England but yes in Wales. In Wales, Class C6 (short term lets) allows for the use of a dwellinghouse for commercial short-term letting not longer than 31 days for each period of occupation.
In parliamentary debates relating to the Renters’ Rights Bill last month, Housing Minister, Matthew Pennycook stated that the previous administration’s proposals to clamp down on holiday lets did not go far enough and that the Labour party is considering what additional weight to give to local authorities to enable them to better respond to the pressures they face as a result of “excessive concentrations” of short term lets and holiday homes. We are expected to hear more about this from the government in due course and wait to see if a new use class in England will ever come into force.
For the record, the proposed national register is also not in force.
What are the rules for short term lets in London?
There have been no further legislative changes since the Deregulation Act 2015 introduced
Section 25A into the Greater London Council (General Powers) Act 1973. This provides that the use of any dwelling in London as temporary visitor accommodation does not constitute a material change of use (or require planning permission), if the two following conditions are met:
- the number of nights of that the dwelling is used as temporary sleeping accommodation does not exceed 90 days, within a calendar year; and
- that the person (or at least one person) who provided the sleeping accommodation for the night was liable to pay council tax, under Part 1 of the Local Government Finance Act 1992, for the property.
The use of a dwelling in London as a short term let for more than 90 days in a calendar year will require planning permission, however several local authorities across the Capital seek to resist the permanent change of use from C3 to holiday lets due to the impact on affordability of homes for local people and the overall reduction in housing supply. Councils such as Westminster City Council have called for a return to the pre-2015 position where short term lets for any duration required planning permission.
The Mayor of London has called for a licensing system that would allow local authorities to regulate the numbers of licenses issued in their area and therefore deter Landlords from breaching the 90-day limit which is currently difficult for local authorities to enforce against.
What are the rules outside London?
The legal position outside of London is less clear. Whether the use of a dwelling for holiday/short lettings amounts to a material change of use would be a question of fact and degree in each case and the answer would depend on the particular characteristics of the use as holiday accommodation (Sheila Moore v Secretary of State for Communities and Local Government Suffolk Coastal District Council).[1]
Landlords should look to local authority development plans to check whether there are specific policies restricting the use of a dwelling for short term lettings.
The St Ives Area Neighbourhood Development Plan contains a “principle residence” policy for new dwellings. New open market housing, excluding replacement dwellings, will only be supported where there is a restriction (either in a s106 Agreement or planning condition) to ensure its occupancy as a principal residence. The policy justification is the impact on the local housing market of the continued “uncontrolled” growth of dwellings used for holiday accommodation (as a second or holiday home).
We can expect tougher measures to be introduced under the Labour government as alluded to above.
What will decision makers consider when seeking to enforce short term lets?
Planning Inspectors have continued to follow the principles laid out in the Moore case which remains the leading judicial authority. Deciding whether a dwelling is a holiday let remains a matter of fact and degree considering the characteristics of a dwelling vs a holiday home. The following factors have been taken to decide the nature of a short term/ holiday let:
- Noise and disturbance arising from the use of the property;
- The type of area or location of the property (i.e. city versus rural / quiet neighbourhood);
- The impact on neighbouring amenity;
- The transient nature of the use of the property; and
- The turnover of guests.[2]
The above is by no means an exhaustive list and several other material considerations can be considered by decision makers.
What is clear is that new planning laws or national policy should clarify for landlords and for local planning authorities, what factors constitute a material change of use from a C3 Dwelling to a short-term holiday let.
[1] [2012] EWCA Civ 1202
[2] See Appeal Ref: APP/E2734/C/22/3305930
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