Short-Term Holiday Lets

Tuesday 19th June 2018 Lords Chamber

Question

14:37

Asked by

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government what plans they have to make it a legal requirement for those offering to let their property as short-term holiday lets to establish that they are legally entitled to do so and to encourage local authorities to set up registers of those landlords.

[Baroness Gardner of Parkes (Con)]

My Lords, while declaring an interest, I beg leave to ask the Question standing in my name on the Order Paper.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, landlords already have legal routes to enforce agreements with tenants where permission is required to sublet. Where short-term lets breach planning controls, responsibility for enforcement lies with local authorities. I would encourage the noble Baroness to meet the Short Term Accommodation Association to discuss her concerns, and would be happy to facilitate that.

[Baroness Gardner of Parkes]

I thank the Minister for that reply. At last there has been a breakthrough in the brick wall facing this issue. Does he agree that when he spoke last week, on 13 June, at col. 1726 of Hansard, he gave me cause to believe that, at long last, his view is that people should not get away with this criminal activity?

[Lord Bourne of Aberystwyth]

My Lords, laws on crimes are enforceable in the normal way. I am not sure what the noble Baroness is referring to. As I say, there are avenues for enforcing agreements and planning controls which local authorities can enforce. The Short Term Accommodation Association is making great strides and I would encourage her to meet up with it.

[Lord Campbell-Savours (Lab)]

My Lords, short-term holiday lets, including Airbnb, can now be classified as business premises. Under the small business rates relief scheme, if the rateable value is under £12,000 a small business pays neither business rates nor council tax—effectively it pays no tax—a system that can be abused. How many properties fall under this category and what is the cost to the public purse of this concession?

[Lord Bourne of Aberystwyth]

My Lords, there is no specific Airbnb concession nor one for Short Term Accommodation Association members. They have to pay tax in the normal way, just as the noble Lord and I have to do, and if they are not paying tax that is illegal. However, in defence of Airbnb, it is operating within the law. In London it cannot go further than 90 days. It is prohibited from doing that by the system which it has introduced, which I have seen.

[Lord Cormack (Con)]

My Lords, at about this time last week my noble friend the Minister did refer to firms acting,

“in a risky and nefarious way”.—[Official Report, 13/6/18; col. 1726].

One did rather draw from that the inference that some action was being contemplated. Can he give the House some idea of what he has in mind?

[Lord Bourne of Aberystwyth]

My Lords, the position regarding the short-term letting area of activity is that it is very much something that the Government encourage. We have a 90-day limit in London, while outside of London there is no restriction in the UK. It is something that operates totally within the law, but if there is a breach, the law should be enforced by the relevant agency. That agency is often but not always the local authority.

[Lord Palmer of Childs Hill (LD)]

My Lords, is the Minister concerned that setting up a register of holiday lets would further encourage more short-term lettings which, without long-term residency, can cause greater problems with anti-social behaviour, overcrowding, and the breaking of leases and insurance terms? That, I suggest, is the crux of the Question asked by the noble Baroness, Lady Gardner—the fact that short-term lets make for bad neighbours.

[Lord Bourne of Aberystwyth]

My Lords, like anything else, short-term lets have to operate within the law. I share the noble Lord’s belief that setting up a register would be of no assistance. Issues such as gas safety, fire safety and environmental protection all apply to short-term lets, just as they do to anything else.

[Lord Clark of Windermere (Lab)]

My Lords, not only do short-term lets pay no local tax, they basically pay no general tax. Is the Minister aware that, unlike owners of longer-term rented properties, those with short-term lets can claim 100% tax relief on mortgage repayments and 100% tax relief on improving the fabric of the property, while at the same time killing scores of villages across the country by buying up ordinary houses purely to make a short-term profit?

[Lord Bourne of Aberystwyth]

My Lords, I recall that I did offer the noble Lord the facility to discuss this further in relation to the Lake District and I restate that offer. I will be happy to look at the position. Businesses have to operate within the law. If they do not do so, they will have the rigour of the law applied to them. Short-term accommodation lets are in the same category and if any noble Lord has reason to suppose that they are not paying tax in the correct way, they should let me have that information. I will ensure that it is passed to the appropriate authorities.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I refer the House to my relevant interest as a vice-president of the Local Government Association. The noble Baroness, Lady Gardner of Parkes, has raised this issue many times and we are grateful to her for that. Is the noble Lord satisfied that the law in respect of short-term holiday lettings is being adhered to generally, or is it being flouted?

[Lord Bourne of Aberystwyth]

My Lords, I can only restate that if the law has been flouted and if noble Lords are aware of that, and that certainly applies to the noble Lord opposite, I will be very happy to look at the particular situation. In so far as any information has been brought to me, I have absolutely satisfied myself that, in those very few cases, the law had not been flouted. Of course these people have to abide by the law, including the 90-day limit. They would be wise to ensure that they are acting within the terms of their lease, but if they are not, that is a contractual matter and it is for the other contracting party—the landlord—to ensure that they abide by those rules.

[Lord Tebbit (Con)]

My Lords, if people have a social housing tenancy and they sublet their property at a profit, are they committing an offence and should they be punished, or do we let it go by?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend will be aware that such action would almost certainly be a breach of the tenancy agreement and, once again, it would be for the relevant landlord, be it the local authority or a housing association, to ensure that the rigour of the law is applied.

[Lord Campbell-Savours]

My Lords, in the question that I asked I made a statement about the position of short-term lets and the payment of business rates. Is the Minister suggesting that I am wrong? If he is doing that, I think he should check his facts.

[Lord Bourne of Aberystwyth]

My Lords, far be it from me to suggest that the noble Lord is ever wrong. If business rates apply in a particular situation, they should be paid, but if they do not apply, they should not. It is as simple as that.