The UK government is trying to tackle the booming holiday let market in London, but a potential loophole in their proposed changes could have disastrous consequences for families struggling to find affordable housing.
The government has scrapped tax breaks for holiday homes and plans to introduce a registration scheme for holiday lets. This is meant to give local councils more control over the influx of short-term rentals, which are seen as driving up housing costs and making it harder for families to find long-term rentals.
However, the government is also giving landlords the right to convert rental properties into holiday accommodation without needing planning permission. This change could override existing planning controls in London, where landlords currently need permission to rent out properties to tourists for more than 90 days.
London Councils Fear a Worsening Housing Crisis
This change could make an already difficult situation even worse, leading to the loss of thousands of long-term rental properties in London.
Adam Hug, the Labour leader of Westminster City Council, believes that this change could result in the loss of over 10,000 rental homes in his borough alone. He worries that this will only exacerbate the housing crisis, making it even harder for Londoners to find a place to live.
Other councils are also sounding the alarm. Danny Beales, a cabinet member in Camden, has warned the government that this change will allow landlords to circumvent planning restrictions, leading to the loss of even more affordable housing. Camden estimates that this change could lead to the loss of 6,000 homes, which is equivalent to the amount of housing the borough is expected to build in the next six years.
The Lure of Holiday Lets: A Lucrative Business for Landlords
One reason for the rapid growth in holiday lets is the financial incentive for landlords.
Landlords can make significantly more money by renting out their properties to tourists than by renting them to local residents. In Camden, for example, a one-bed studio can generate £1,173 per week as a holiday let, compared to just £270 per week on the private rental market. This makes it tempting for landlords to convert their rental properties into holiday accommodation, even if it means displacing families looking for a long-term home.
Councils Seek Solutions, But Face Delays
While some councils are planning to implement new restrictions on holiday lets, they will need to collect evidence and go through a year-long process before they can implement these changes.
This delay could mean that the problem gets even worse before councils can take action. Cornwall, which has about 12,500 holiday lets and 27,000 people on its social housing waiting list, is one example of a council facing this challenge. The council is concerned that the rise in holiday lets is making it increasingly difficult for local families to find affordable housing.
The Government’s Perspective: Balancing Tourism and Housing Needs
The Department for Levelling Up argues that permitted development rights will be beneficial across the country, and that it cannot comment on the impact of the changes in London.
The government acknowledges that holiday lets can benefit the tourism industry but recognizes that they can also have negative consequences for communities struggling with housing shortages. They argue that the changes they are making will give communities more control over the number of short-term lets in their area.
This loophole could lead to a substantial loss of affordable housing in London, potentially exacerbating the already challenging housing situation for families. It remains to be seen how the government will respond to the concerns raised by local councils and whether they will reconsider their proposed changes.
