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Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
I beg to move,
That this House has considered the regulation of short-term lets.
It is an honour and a genuine privilege to serve under your chairship, Mrs Harris. The issue of short-term lets is an acute one for my Cities of London and Westminster constituents, so I am pleased to have the opportunity to raise it today and to discuss it with colleagues from across the House and across the country, and I look forward to the discussion with the Minister.
We need to improve the regulation of short-term lets in this country, from constituencies such as mine in central London to Truro and Falmouth in Cornwall, East Thanet in Kent, Morecambe in the north-west, and in cities like York—represented so ably by my hon. Friends today—where the demand for short-term accommodation is so high and the housing crisis so acute. Every place has its story to tell—I look forward to hearing them this afternoon—about how short-term lets are changing communities, sometimes for the better, but rarely in a way that is without challenges. We can see from the range of places represented that any solution has to be a national framework with power in local communities to decide on certain elements.
Alison Hume (Scarborough and Whitby) (Lab)
Scarborough and Whitby are understandably popular destinations for holidays and short breaks, but the impact of short-term holiday lets is forcing people out of the towns. Today there are only seven homes available to rent on Rightmove in the Whitby area, while there are 300 properties on short-term let platforms. Does my hon. Friend agree that the Government need to move at pace to introduce licensing and new planning powers for councils?
Rachel Blake
I agree, and the work that my hon. Friend has done to research the impact on the private rented sector is really helpful. I hope that we will continue that work together.
If I may relate this debate to wider business in the House, it is incredibly welcome to be conducting this debate the day after the introduction of the Renters’ Rights Bill. I warmly welcome the Minister here, and I congratulate her and the wider team on the speed with which they have brought forward legislation that will improve the lives of millions of people.
Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)
I congratulate my hon. Friend on securing this important debate. She highlighted the Renters’ Rights Bill, which is a welcome piece of legislation. We want to give security to renters. Is it not right that as well as security for renters, we should also have security and high safety standards for tenants in short-term lets, and people who actually pay their business rates and VAT as part of their operation?
Rachel Blake
I am glad that my hon. Friend raises that issue, which is twofold. First, it is about a level playing field with other types of business. Secondly, it is about safety for the consumer. I hope that we will have a chance to explore those issues.
There are 27,798 private renters in the Cities of London and Westminster, all of whom will be better off thanks to this Government. The Renters’ Rights Bill demonstrates that the Government are taking the housing crisis seriously, and I look forward to working with my hon. Friend and other colleagues on it as it makes progress through the House.
I think we would largely agree that platforms like Airbnb are not inherently a bad thing. I imagine that many in this room use Airbnb or similar services when we go on holiday, but we cannot deny that this has changed from being a peer-to-peer marketplace to something much broader. What started out as a way to make additional income from a spare room has become a significant cause of the decline in the number of homes available for local residents.
Noah Law (St Austell and Newquay) (Lab)
I thank my hon. Friend for securing this debate, which is crucial to the Cornish hospitality industry and housing landscape. Does she agree that while there is a need to establish a truly level playing field, for different kinds of holiday accommodation, including furnished holiday lets, we need to ensure that we support those local bona fide holiday businesses to continue to operate, lest we risk them flooding on to the market as more institutionalised Airbnbs or, even worse, second homes that are not well utilised?
Rachel Blake
I agree about the issue of the different types of places and different types of tourism and holiday accommodation. The experience in the centre of London is driven by technology. Previously, the ability to let out a room or even a whole home was much less, but in areas that have longer-standing tourist let economies—such as my hon. Friend’s area and those of other colleagues—we have found that there are different challenges. I believe that those can be discussed through the progression of the regulation of the sector. I thank him for raising that important topic.
Andrew George (St Ives) (LD)
Does the hon. Lady agree that this is about the politics of justice, not the politics of envy? It is not just an issue of the taxation of furnished lets. There has been an industrial movement of properties—second homes—going from being registered for council tax to being registered for business rates, and people then apply for small business rate relief and pay nothing at all. Against that, we do not get the investment in affordable homes for local people. In Cornwall alone, £500 million of taxpayers’ money has gone into the pockets of holiday let providers, while those specifically created, for planning reasons, with planning restrictions are outside that—
Rachel Blake
I thank the hon. Gentleman for that helpful intervention and for elaborating on that point. I definitely believe in the politics of justice over the politics of envy. Technology has industrialised this sector, so we need to come up with a policy framework that reflects the scale of the changed situation.
Having large numbers of whole short-term lets in relatively small geographical areas, and on an increasingly commercial basis, as we have discussed, hollows out communities. It causes waste management issues and gives rise to concerns about community safety, and it depresses the availability of homes in the private rented sector.
I will discuss the impact on housing supply and then come on to the environmental impacts. One of the issues with this topic is that in some areas, there is a lack of concrete data, at least in part because of the lack of regulation. That means that much of the information comes from the experience of housing teams in local authorities and what data can be scraped from the relevant platforms. According to detailed work by Westminster city council, around 13,000 properties are listed as available for short-term let in Westminster. Over 20% of the housing stock in the west end ward are short-term lets and, at the time of the census, 30,000 properties in Westminster had no full-time residents. We have that information only because of the hard work of Westminster council’s environmental health officers and others.
One in every 85 homes in the capital is available for short-term let on some basis for an undetermined number of nights each year. That is a problem in itself. As Claire Colomb, professor of urban studies and planning at University College London, noted:
“London is one of the least regulated European cities”
when it comes to short-term lets. Even Airbnb has been calling for a registration system for years, and the Short Term Accommodation Association agrees with the need for a national administered registration scheme.
Allowing short-term lets to proliferate without regulation is a potential challenge to growth. That may sound counterintuitive, but the variety of accommodation options in the tourism industry means that they are not on a level playing field, as we have discussed. Hotels, traditional bed and breakfasts, and hostels have to abide by safety regulations, which short-term lets, for example, simply do not.
Where we do not lack statistics, though, is in housing need. The latest homelessness figures show the highest ever number of families in temporary accommodation in London: 65,280. In March this year, over 3,000 households were in temporary accommodation in Westminster alone. I am sure that that is borne out in the inboxes of all Members here.
Every day I hear from a new family struggling to stay on an even keel after they have had to move to temporary accommodation away from school and their support networks. Just this week, I heard from a mother who has been moved to Dagenham, over 12 miles from her daughter’s school, where she also works as a teaching assistant. She is realistic about how long they are likely to be in temporary accommodation and knows the state of the London private rented market, so to prevent her son from having to commute for four hours a day and to try to make sure that he has friends locally, she would like to move him to a school in Dagenham, but without childcare support that means giving up her job. Families across London and across the country have to make that kind of decision every day, and it is not good enough. It is creating incredible pressure on our wider system and local authority finances due to the rising costs of supporting households in temporary accommodation—London councils estimate the cost to be £90 million every month—and it is all because there are simply not enough affordable homes for people.
Many of these pressures are directly attributable to the failures of the last 14 years, whether it is austerity eating into the resilience of our public services or the failure to reform the planning system to give local places more control over what is happening in their communities. In government, Labour banned the long-term use of bed and breakfasts for homeless provision, and between 2005 and 2010 the number of households in temporary accommodation halved. The national affordable homes programme got Britain building between 2008 and 2011, and the Mayor of London has started building the highest number of council homes since the 1970s. Even in opposition, Labour MPs such as Karen Buck, the former Member for Westminster North—parts of which are now in my constituency—improved housing standards through the Homes (Fitness for Human Habitation) Act 2018.
The proliferation of short-term lets of whole homes is making the availability of private rented homes much worse. Of course, London is a proudly international city, and we need to make sure that flexible accommodation options are available for visitors, but we will remain a thriving international city only if we ensure that sufficient housing is available for Londoners. Whole homes rented out consistently as short-term lets—again, I am not talking about residents who go on holiday and list their homes while they are away—are making it much more difficult for communities to stick together.
I was contacted by a constituent, Jayne, who summarised the situation well when she wrote that
“when I first moved here twenty-five years ago, I had neighbours. Now I am concerned about the security of our building because of the constant turnover of strangers”.
In strong communities, such as the ones that we all represent and the neighbourhoods of the Cities of London and Westminster, neighbours are the ones who watch our kids when we go for a job interview and who help us to book a GP appointment. It is these communities that are at risk if we do not take action now to regulate short-term lets. As a proud Labour and Co-operative Member of Parliament, I believe that the answer lies in community power, creating local assets and businesses that are owned—in the realest sense of the word—by the people who use and rely on them. What would it look like if, instead of a tourism sector that stretches the resilience of communities, we built one that created opportunities?
As well as hollowing out communities, there are environmental challenges in the growth of short-term lets in the Cities of London and Westminster. Waste management and noise are consistent issues. There is almost no way for councils to enforce against them, not least because they do not have access to the resources to do that, so any policy on enforcement action comes at the cost of council tax payers, rather than those creating the problems in the first instance. That is one of the consequences of an under-regulated market.
Local authority environmental services teams are working tirelessly on these issues, but they can enforce against only those they actually catch red-handed in breach of the rules. That makes it very challenging for short-term lets, as the visitor is gone in a matter of days, and it is difficult to establish a responsible and accountable person for those listings. That is why a registration scheme needs to ensure that there is not only a unique property reference number, but a single point of contact responsible for the property. Frequently, the noise from short-term let flats is intolerably loud at very unsocial hours and unbearable for long-term residents, and it should be avoidable.
The lack of clear and consistent regulation means that enforcement capability sits with organisations and individuals who are not incentivised to enforce, while those who want to enforce are often those without the resources. A private landlord whose tenant is using their property as a short-term let is not incentivised to enforce against a breach of lease—although they might choose to—unless it is causing them any direct inconvenience. They would rather avoid reletting the property. The same goes for freeholders whose leaseholders are sub-letting on a short-term basis, whereas resident management organisations and the council, which of course want to enforce wherever possible, lack either the resources or legal recourse.
However, there are solutions. I believe that we must create a compulsory registration scheme that captures each individual property, using a unique property reference number; ensure that platforms are sharing data, as part of that scheme, on the number of nights for which each property, identified by its unique property reference number, is listed on their sites; ensure that the registration fee is reasonable and proportionate so as not to drive out the small or individual hosts in the market; ensure that where whole-home accommodation is consistently being let out on a short-term basis, there are in place commercial measures, including a named, verified and accountable individual, gas safety certificates, commercial waste contracts where necessary, and appropriate insurance; and give local authorities the power to prosecute those accountable individuals for antisocial and illegal activity, such as fly-tipping. I simply do not believe that that would be overly onerous.
Proposals to manage short-term lets through the planning system are welcome in theory, but the proposals by the previous Government were not suitable for this context. These proposals were a new use class and associated permitted development rights. A new use class for short-term lets not used as a sole or main home is not problematic in theory. The issue comes with the proposal to automatically reclassify existing dedicated short-term lets into this use class without planning permission. This, as the Local Government Association has pointed out, would be at odds with the premise and purpose of creating a new use class for short-term lets, and would give local authorities no say in their location, size and quality.
There are practical solutions to all these challenges. I urge my hon. Friend the Minister, when she, along with colleagues from the Department for Culture, Media and Sport, considers this issue, to ensure that there is a robust national registration scheme, with data input from the platforms, as I mentioned, and that applications for short-term lets that exceed 90 days per year are dealt with under the normal planning application process for a change of use, rather than our automatically entrenching the current unsustainable situation. Local authorities must have enough resources—probably from revenue raised from the registration scheme—to enforce the rules.
Those suggestions learn the lessons of attempts to regulate short-term lets in other major cities, where they have benefited from the data and information available. I firmly believe that we should use all the powers at our disposal to address the housing crisis. Although I know that dealing with short-term lets is just a small part of solving the problem in places such as mine, in the Cities of London and Westminster, it could improve people’s lives, strengthen our communities and at least ease the desperate need for housing in the private rented sector, so today I urge the Minister to prioritise this. I would be grateful if she outlined a timeline for Government action on bringing forward a national registration scheme and considering and consulting on the future regulation of short-term lets through the planning system.
Several hon. Members rose—
Carolyn Harris (in the Chair)
I remind Members that anyone wishing to speak needs to bob. I have to impose a four-minute time limit from the outset, as this debate is oversubscribed. You can all sit down until I have finished. I call Anna Sabine.
Anna Sabine (Frome and East Somerset) (LD)
In my fairly rural constituency, many owners of short-term lets have been in touch with me this week because they are worried that this debate will focus particularly on the challenges in major cities and tourist towns and not take into account local rural economies that often rely on some element of short-term lets to survive. I should say that many of the people who have contacted me are also very happy to see the sector further regulated, so they are not anti that. Does the hon. Member for Cities of London and Westminster (Rachel Blake) agree that there is a balance to be struck between regulating short-term lets and supporting the importance of what they bring, particularly to rural economies?
Rachael Maskell (York Central) (Lab/Co-op)
It is always a pleasure to see you in the Chair, Mrs Harris. I congratulate my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) on an outstanding presentation of all the issues that we have been wrestling with for so long. I spent six months on the Levelling-up and Regeneration Bill fighting for the licensing of short-term holiday lets. We only managed to achieve a registration scheme and a consultation on a change in use class. As my hon. Friend said, that would grandfather the rights of existing short-term holiday lets, locking in the inequity that we already see in our communities.
I have around 2,000 short-term holiday lets in my own constituency and I know the challenges that they bring as housing demand outstrips supply. As a result we have a serious housing crisis, not least where we have clusters and people lack access particularly to family homes. Short-term holiday lets break up communities and distort the normal community life that we have come to expect.
We need a Bill—I have one I prepared earlier, which I presented to the House in 2022; I believe it still stands today. I will talk the Minister through my Bill, which has a licensing scheme rather than a registration scheme for the conversion of domestic properties into short-term holiday lets in exchange for a fee, differentiated of course if somebody lets out a single room in their own property.
Local authorities could issue fines or remove licences if conduct was criminal or if antisocial behaviour continued in the home. Also, a licensing scheme would ensure proper standards in the homes, with environmental controls, health and safety standards and electric and gas checks. That would bring short-term lets level with the traditional B&B sector so that there was no inequality there. It would also restrict the number of days that they can operate. Local authorities would be able to determine the standards within which they practised, giving them control in local communities.
The Bill was drawn from best practice across the world where schemes have already been tried, tested and tweaked, so we know that it would operate well. It would improve safety, the environment and communities. The licence would be renewed every three years to balance the administrative burdens with the need for inspection. It would be self-funding, with no extra cost to local authorities. Every short-term holiday let would have a named person who could be contacted and who would be liable for the management of the property. Also, the licence would say how many people could stay at the property so that there was not an overcrowding problem.
We know that as Friday night comes and the wheelie trolleys go down the streets, neighbourhoods are in fear because they know the parties are about to arrive. Well, we can get on top of that and also the criminality. These places have been used as pop-up brothels, for child exploitation and as drug dens. By ensuring that a proper scheme was in place, we could get on top of that, too. It would help the industry, landlords, visitors, and most of all communities and would regenerate our housing for the purpose for which it was built.
Richard Foord (Honiton and Sidmouth) (LD)
It is an honour to serve under your chairship, Mrs Harris. I congratulate the hon. Member for Cities of London and Westminster (Rachel Blake) on calling this debate. Many of us in this House were eager to have it, so we are glad that she secured it. I am also glad that she referred to examples of short-term lets from beyond her constituency of Cities of London and Westminster because it would be a real error to see short-term lets only from the perspective of the sorts of properties that are available in the area outside this Palace in which we speak today.
I urge the Minister and civil servants who might be listening not to draw entirely on examples of the challenges that London boroughs experience around short-term lets. They would be welcome to come at any time to Devon and the Honiton and Sidmouth constituency that I represent to see the fantastic tourist businesses that exist before they consider regulation of the sector.
We must beware of having a one-size-fits-all policy that might fit very well here in London but that does not fit nearly so well in our rural areas and coastal towns and villages, which are quite depopulated. It was only yesterday that there was a debate in this Chamber on the depopulation of rural areas, and such depopulation is what is at stake here.
We know from the Professional Association of Self Caterers UK that traditional self-catering businesses could be subject to some of the new rules that are being introduced after the spring Budget, which was introduced by the right hon. Member for Godalming and Ash (Jeremy Hunt) when he was Chancellor of the Exchequer. The right hon. Member talked about stripping away parts of the furnished holiday let regulation system to create what he thought would be a level playing field. However, I can assure you, Ms Harris, and others that there will not be a level playing field, because there is no level playing field between those traditional holiday lets—the self-catering businesses that are already so excellent—and some of the fly-by-night Airbnb properties that are put on the market for overnight rent but taken off long-term lets. They are neither available to long-term renters nor being marketed to the same standards that we have come to expect of traditional self-catering properties.
This issue is crucial for the economy of Devon. I have with me a report from the Devon Housing Commission, which has been examining the shortage of housing stock in the county. It says that the “traditional” holiday let sector is at risk of losing £779 million of income. That sector encompasses not just those people who let their farmsteads or perhaps their heritage houses; it also includes the food and drink sector and the entertainment and tourist sectors, which depend on holiday makers.
The Liberal Democrats welcome the proposal for a registration scheme and the efforts to try to make more housing available for those seeking long-term lets. However, we also need to be careful. In particular, I urge that we pause the furnished holiday let regime that the former Chancellor of the Exchequer introduced in the spring.
Lizzi Collinge (Morecambe and Lunesdale) (Lab)
It is a pleasure, Mrs Harris, to serve under your chairship.
I thank my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) for securing this debate. My constituency is very different from hers, but they are both worthy of consideration when discussing short-term lets. Morecambe and Lunesdale is a constituency with a thriving urban and rural tourism economy. From the stunning landscapes of the Lune valley to the beautiful coastlines of Morecambe Bay to the wild beauty of the Yorkshire Dales National Park, we are blessed with an array of attractions.
Visitors to our constituency contribute to the local economy, support small businesses, and help to maintain the vitality of our towns and villages. Short-term lets, such as holiday rentals, play an important role in enabling this tourism and provide much-needed accommodation options. They also support local businesses, such as shops, restaurants and activity providers.
However, although we recognise that contribution, we must also acknowledge that the rapid growth in this sector is causing unintended and harmful consequences. Residents in areas such as Silverdale, Arnside, Sedbergh and Dent are seeing the effects of too many properties being taken out of long-term residential use and converted into holiday lets. The balance between supporting tourism and ensuring housing availability for local people is becoming harder to maintain. In Morecambe, we will soon welcome Eden Project Morecambe. As a responsible constituency MP, I am trying to look forward to see what risks, as well as benefits, that project might bring. One of the key risks is the potential impact of short-term lets on the local housing market. Already, some of the worst casework in my inbox is due to a shortage of housing.
That is why I believe that a licensing system for short-term lets that is fair, takes a balanced approach and works for both tourists and residents is right. Regulations would ensure that properties met safety standards, were used responsibly and did not unduly harm the local housing market.
I stress that I do not want to limit residents’ ability to occasionally rent out a room, or exchange their home in a bid to get an affordable holiday. For Morecambe and Lunesdale, a balanced approach is crucial. Our local economy benefits greatly from tourism, and short-term lets are a key part of that success, but we must ensure that it does not come at the expense of local residents who are struggling to find a home or find stability in their community. Yesterday, I spoke about the number of young people leaving our rural areas, and short-term lets are contributing to the problem of depopulation.
We must look at the broader infrastructure challenges that come with an increase in short-term lets. I know some will say that regulating short-term lets would harm our rural economy, but I disagree: I believe that thoughtful, locally tailored regulation will strengthen it and help the existing businesses that pay business rates and meet safety standards.
Morecambe and Lunesdale is a place where tourism and community life go hand in hand. Short-term lets play a role in supporting that, but they must be properly regulated to ensure that local people are not harmed. Our policy must strike the right balance, and I look forward to working with Members from across the House, the local authority and tourism organisations to ensure that.
Ms Polly Billington (East Thanet) (Lab)
It is a pleasure to serve under your chairship, Mrs Harris. I thank my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) for securing this debate.
My constituency is made up of three towns that symbolise English seaside holidays: for more than two centuries, people of all classes have visited Margate, Broadstairs and Ramsgate to take the fresh sea air and enjoy our marvellous beaches and amazing microclimate. Where and how people stay has changed over the years. As boarding houses, holiday camps and large hotels have declined, short-term holiday lets have opened up the chance for many to take a short trip to the coast; but that is not without its drawbacks for many in our community.
Hotels and places offering bed and breakfast are regulated and licensed, which ensures good standards of safety and environmental health for customers, and means that the services the council needs to provide for such establishments can be planned for. Appropriate business rates also mean that the services can be provided. None of that happens with unregulated short-term holiday lets, facilitated by platforms optimistically set up as part of the sharing economy. Instead, as the popularity of British holidays and short breaks has risen, not least since the pandemic and Brexit, so have property prices in places such as East Thanet, as people buy homes as a second place for them to stay at weekends and then rent them out when they are not there. Data compiled by VisitEngland suggests that there has been a 75% increase in short-term holiday lets since 2019: more than 2,000 properties are available for short-term let this year.
Helena Dollimore (Hastings and Rye) (Lab/Co-op)
My hon. Friend and I both represent beautiful coastal constituencies. Does she agree that we must get the balance right between the contribution that short-term holiday lets make to the tourism and hospitality economies in our constituencies and the need for affordable homes for locals, to address the acute housing crisis that both our constituencies face?
Ms Billington
I could have not said it better myself.
The large increase in short-term holiday lets has left whole streets dark and empty for months on end as the days shorten, with perhaps a small glimmer of light and activity over Christmas and new year. One of my constituents said in an email only today:
“We don’t have any neighbours: they are all Airbnbs…Our lives are being hugely impacted by huge parties each weekend!”
The problem affects the community in many ways. How can primary school places be planned for when family homes do not hold families? How can the council prepare for waste collection and disposal from effectively commercial premises when it does not know where they are or when they are occupied? How do the police deal with the increase in antisocial behaviour that follows from the proliferation of party flats when they are not licensed or regulated? How does a whole community deal with spiralling property prices, driven by an increased appetite to make money from homes rather than live in them?
If Members search on Zoopla or Rightmove for rental prices in Thanet, they will find 140 flats and houses available for less than £1,000 a month. Then if they search Airbnb for Margate, Ramsgate, Broadstairs or equivalent places to stay, they will find more than 750 short-term lets next spring for £100 or more a night. There can be no doubt that such a mismatch is helping to drive house price inflation, rent inflation and the shortage of housing availability in Thanet where, during the summer months, a flat can be rented out as a short-term holiday let for potentially three times or more the rent it would fetch as a home for someone.
We are a seaside community made up of holiday resorts. We are proud of our heritage and know that it will and should be part of our economic future. Yet the beauty and attraction of the place that people come to visit needs to be underpinned by a strong community, with decent services and affordable homes for those who live there all year round. There must be a balance.
I am confident in my advocacy for regulation, not just because of the concerns raised by residents but because voices within the industry in my community also see the impact of rising house prices and stretched public services on their families and employees. The Minister should be in no doubt: East Thanet is ready for regulation and licensing to support our holiday industry and our community. I only urge that the package of measures really is designed with communities like ours, not imposed on them. Ideas on how to license, introduce and enforce standards, plan services and facilitate a process that works for those who offer the service, as well as those who use it, should be taken on board from those who are already living with the consequences of an unbridled market with few, if any, checks or balances.
We know we are not alone in Thanet. Many of my colleagues along the Labour Benches also represent coastal communities. This debate shows that the unregulated nature of the market is blighting a host of communities where people rightly go to enjoy themselves and contribute to the local economy. I urge the Minister to consider how the package of powers and tools can support our coastal communities in particular to thrive.
Joe Powell (Kensington and Bayswater) (Lab)
I congratulate my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) on securing this debate and giving the subject the attention it deserves. We obviously share a border, but we also share an office in this place that, with its high ceilings and windows, comfortable sofas and views of Whitehall, I am sure would fetch a very high price if it were a short-term let. I hope we can agree that we will not be doing that in our period of sharing an office.
When I was knocking on doors during the general election campaign, the issue of short-term let regulation united constituents in South Kensington, North Kensington, Bayswater and Lancaster Gate. That was due to the current effective free-for-all with weak rules that are barely enforced, leading to issues that had very real and personal consequences for them and their families. It was not just the antisocial behaviour, noise and associated crime, but the violations of building insurance, mansion block rules and tenancy agreements, which had very real impacts on service charges and their day-to-day living in flats. I therefore agree with many of the speakers in the debate that there must be a middle ground where we can find sensible regulation that allows a destination like Kensington and Bayswater to continue to welcome millions of tourists from around the world, but with a system that can also help tackle our housing crisis.
To give hon. Members a sense of the scale of the problem, I share councils—Kensington and Chelsea and Westminster—and it is estimated that more than 5% of properties in both those council areas have been listed as short-term lets. As my hon. Friend the Member for Cities of London and Westminster said, the latest estimate in Westminster is 13,000. It is therefore important that any proposed changes related to change of use do not lock in those numbers, and that we sequence the reforms correctly.
There are some things that work and I praise the councils that, with limited tools, have been able to take some steps on enforcement, especially in Westminster. Kensington and Chelsea agreed a deal with Airbnb that would share data around some council blocks, so that leaseholders and council tenants in those blocks who might be in breach of their tenancy could be investigated. However, that also struck me as unfair when we have 40% of our residents in the private rental sector, where there is very little regulation.
As for solutions, I join others in calling for the Government to consider a licensing scheme, while thinking carefully about some of the lessons already learned. For example, the 90-day rule is totally unenforceable. With multiple platforms listing properties, and very small and limited—even non-existent—resources in local authorities to enforce the rule, we must ensure that fees are paid into the system to help cover the enforcement cost for local authorities, so that the cost is proportionate. We must also ensure that each property—not just each host—is registered, because individual properties have different consequences. This is an important part of tackling our housing crisis. I am delighted with the Renters’ Rights Bill, introduced yesterday, and I believe that if we also brought in a complementary package of reforms, it could make a real difference for constituencies such as mine.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
This debate was called by a London Member, my hon. Friend the Member for Cities of London and Westminster (Rachel Blake). I am grateful to her, but I am happy that so many Members from across the country are here too. I wanted to make sure that our voice from Cornwall, where this is a really big issue, was heard very loudly. We have been running a “first homes, not second homes” campaign for a number of years.
Cornwall is the local authority with the largest supply of short-term lets outside London. There are around 24,300 properties in Cornwall, which is up 30% on 2019, while there are about 27,000 houses on the social housing waiting list—hon. Members can see the balance there. Statistics from the council tax base tell us that there are probably about 13,000 second homes registered in Cornwall. That is nearly 5% of the total housing stock, which is nearly five times higher than the average across England. Plus, we have roughly only 10,000 council houses and 22,900 housing association homes in Cornwall. We have 800 families in emergency or temporary accommodation. Lots of families have been evicted under section 21—a situation that will hopefully improve, now that the Bill has been introduced. Businesses struggle to get key workers. The private rented sector has all but collapsed in Cornwall, to be honest.
The taxpayer has lost about £20 million per year, as a result of the loophole allowing second homes to be registered as holiday lets for business purposes: they pay neither council tax nor business rates. During covid, approximately £170 million went to properties that were registered as business lets, with £100 million of that going out of Cornwall, which shows the ownership of the properties.
We have done an awful lot of work on this, and I suggest that the Minister should consider a toolkit of measures to deal with some of the issues. First, lots of people have talked about a licensing scheme obliging owners of short-term lets, including Airbnbs, to register them for a fee for three years, which seems like a sensible amount of time. We would then know how many there were and where, and could push for fire and safety checks to be mandatory. It would be a similar scheme to the licensing of houses in multiple occupation, which currently only applies to homes registered for five or more people; it would seem sensible to increase the scope of HMO licensing as well.
Secondly, we want the business rates/council tax loophole closed. It should not be possible to pay no council tax or business rates on a property; it is just not fair. Thirdly, Cornwall council has already voted to double the council tax on empty second homes, and has actually asked the Government if it can triple it. Given that the council is Conservative-run, and that this decision was agreed cross-party unanimously, it shows how severe the problem has become in Cornwall. If we were to implement that, every time the council tax was doubled it would raise £25 million.
Finally, we should create a planning use class for short-term or holiday lets, so that homeowners need to actively apply for permission for the change from “lived in” to “holidayed in”—flipping the default that the Conservatives suggested. Those are the four measures I would like to see in the toolkit, which could be given to local authorities or could form part of the devolution package.
Markus Campbell-Savours (Penrith and Solway) (Lab)
My constituency includes parts of the Lake District national park and I have been a councillor for the town of Keswick for a number of years, so this has been a big issue for me. It was interesting to hear my hon. Friend the Member for York Central (Rachael Maskell) talk about the number of holiday lets in her constituency, which I think she said was 2,000. The CA12 postcode, which comprises Keswick and the surrounding villages, has 1,000 holiday lets. The impact on a micro level is part of the issue. There will be people in some councils around the country who will listen to this debate and think, “What are they talking about?”, but others will know exactly what we are talking about and recognise the problems that it is causing for our people.
I have followed this debate for a few years, and I appreciate the toolkit approach, but my worry is that that is throwing everything at it. We have to remember that some of our tourism economies are now quite reliant on this accommodation. We have even seen some traditional holiday accommodation, such as bed and breakfasts and guest houses, move away because people prefer self-catering options. For me, the question is how we remove the bubble, which is causing so much harm, without destroying our tourism economy. We need to look at the range of options and evaluate them by asking what we would really gain from them and what damage they would cause.
I want to start with tax, which is a funny one. Some people have the idea—I have never bought into it—that if we throw taxes at people, eventually there will be a new equilibrium and all of a sudden we will hit a sweet spot where we have the right number of holiday lets and everyone is happy. Even if we were to achieve that in the Cities of London and Westminster or in Cornwall, it might not work in my area. I do not believe the tax system is designed in a way that will allow us to manage this problem. I appreciate the arguments about fairness and what is just, and whether it is right that, every time a property turns from a residential property to a holiday let property, the tax burden of the parish precept has to be put on the neighbours, because of the way that calculation is done. I get that parts of the tax system are unfair, but I still do not think it is the answer to our problem.
There is also the registration system. I am grateful to my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) for bringing this issue to Westminster Hall. I used to be a Labour activist in her constituency and I remember it being talked about on the doorstep, but Westminster has a key thing that some other areas do not: the 90-day rule. It also has many people living in leasehold properties who are forbidden by their leases from offering short-term lets. The real issue in Westminster is the cat-and-mouse game whereby the leasehold block management companies chase people to try to prove that photographs on Airbnb are of the inside of their flat. Neighbours make complaints, but often enforcement is not possible. I can see the power of a registration scheme for enforcement by those companies and by councils. We have seen this problem on the Churchill Gardens estate, with chocolates on the pillows —the works.
I can see why a registration system would work in London, but there is a big flaw in it. In my area, it would only allow us to do one thing: count how many short-term lets there are. I do not need to count them to know the damage they are causing. What we really need is caps. Some people say, “Well, use the planning option,” but that would see permission given in perpetuity under permitted development rights. It would be a disaster for my community if the 1,000 holiday lets were made permanent in that way.
My hon. Friend the Member for York Central suggested a licensing scheme, and I think that is the way forward. That would allow us to build in caps. Importantly, whereas the planning system is under-resourced, does not have the funds and is front-loaded because people only pay for planning applications at the beginning, under a licensing scheme, owners would have to pay on an annual basis.
Andrew George (St Ives) (LD)
I congratulate the hon. Member for Cities of London and Westminster (Rachel Blake). I think I got the name of her constituency right; I come from Cornwall, so I do not know exactly how the boundaries cut in this part of the world. In my part of the world, as the hon. Member for Truro and Falmouth (Jayne Kirkham) explained, hundreds of families are still being evicted to make way for yet more holiday lets, because that is the way the tax system and what I will call the economic advantage system work in a place like ours. I will come to the tax system, which the hon. Member for Penrith and Solway (Markus Campbell-Savours) referred to.
We need to address issues of social justice. As I said earlier, this not the politics of envy; it is the politics of justice. I know that we have all been heavily lobbied by those who are concerned about changes in the rules for furnished holiday lets, but we are not being lobbied by the people who are being made homeless as a result of the evictions that are taking place to create even more of those holiday lets.
The late, great Paul Flynn used to say that it is the role of a Member of Parliament to seek out the silent voices, and I believe that is what we should be doing. We should be looking at the issues of social justice and not only listening to the loudest voices in the room. We also need to distinguish between properties that are given specific planning permission that provides for holiday lettings with restricted occupancy and those that would otherwise be used, or have been used, for permanent occupancy. That point has been addressed in the debate already, but I wanted to emphasise it.
I am very much in support of carrying on in the direction of a registration scheme. I also support the hon. Member for Truro and Falmouth on widening the requirements for a C5 change of use class order so that specific planning permission is required for any non-permanent occupancy of a property, not just holiday lets. That is really important, because otherwise we will have all sorts of flipping going on in the system.
The problem we have is that since the Conservative Government introduced the opportunity for second home owners to flip them in order to apply for business rates, and then apply for small business rates relief and pay nothing at all, billions of pounds have gone into the pockets of very wealthy property investors when we should be spending that money for local people. It is simply unfair that the poor are penalised through council tax for allegedly underusing their council house, but the rich are being rewarded for underusing their property investment vehicle. I would be surprised if a Government who say that those with the broadest shoulders should bear the greatest burden do not address that issue or the issue of social justice. In Cornwall, £500 million of taxpayers’ money has gone into the pockets of holiday home owners since 2012, and that is simply unacceptable. I hope that we can address those issues by having not only a stronger planning policy but justice in the tax system.
Mr Joshua Reynolds (Maidenhead) (LD)
It is a pleasure to serve with you in the Chair, Ms Harris. I thank the hon. Member for Cities of London and Westminster (Rachel Blake) for securing this important debate, and I also thank her for making the distinction between homeowners who sometimes rent out their property when they are on holiday and the commercialised industry that has developed. There is a clear distinction between the two, and I thank her for raising it.
Short-term holiday lets have a role to play in boosting the local economy in holiday and city destinations, as has been mentioned by Members already. Until recently, I was the vice-chair of the VisitWindsor partnership, and I saw for myself the benefits that short-term holiday lets can bring to a town, particularly during events such as the funeral of Her Majesty Queen Elizabeth II and the coronation of King Charles III.
In the 19th century, my constituency of Maidenhead, aided by the advent of the railways, became a popular holiday destination and was known as the jewel of the Thames. Today, it is not necessarily the go-to place for a weekend away, but we still have a number of short-term lets, which are not for holidays but instead support UK and global headquarters based in the town. They provide flexible accommodation for employees and visitors who come to the constituency, spend a few nights in a short-term holiday let and use our local facilities, such as the fantastic restaurants and businesses that we have. That is really welcome, but there is too much of a good thing.
The Royal Borough of Windsor and Maidenhead council is one of many up and down the country that is facing rising housing costs, as it is battling to build both affordable housing, and temporary accommodation for people who find themselves homeless—some of whom have been evicted from properties that have made their way to being short-term holiday lets, as my hon. Friend the Member for St Ives (Andrew George) discussed. Some people are being forced to uproot their lives, take their children out of school and give up their jobs to move elsewhere in the country. It is devastating for everyone involved.
We have heard how councils could play a role in what the future looks like, but we have seen local authorities being asked to do more and more with less and less, which has plunged some into financial crisis. In rural areas, the growth of short-term holiday lets is undermining our communities. Key local services such as bus routes, shops and post offices are closing down. The hon. Member for East Thanet (Ms Billington) mentioned being told, “We don’t have any neighbours.” No Member can fail to be moved by that statement. When we hear something like that, I think everyone is clear that something needs to change.
The Liberal Democrats have long argued for local authorities to be given more powers, backed up by proper funding, to control second homes and short-term holiday lets in their area. We would allow local authorities to increase council tax by up to 500% where a home is bought as a second home, and bring in a stamp duty surcharge for overseas residents purchasing properties. In that way, owners who profit handsomely from the tourism business would be forced to pay back into their local communities.
During consideration of the Renters (Reform) Bill, the Liberal Democrats argued for a six-month moratorium on the marketing of a property as a holiday let if it had been repossessed by the landlord on no-fault grounds. Local authorities are key to this, because they know what is right for their area. The hon. Member for Morecambe and Lunesdale (Lizzi Collinge) spoke earlier about a thoughtful, tailored, local approach, which we would welcome.
We are calling for a separate planning class for short-term holiday lets, requiring owners to apply for a change of use and allowing local authorities to set their own numbers.
Mr Reynolds
I thank the hon. Member for that intervention. We need to make sure that what we do is backed up by funding so that local authorities are able to enforce the changes that are needed. I would not want to see local authorities having changes forced upon them without the finances and manpower to carry them out. We have seen so many cases recently where local authorities have a duty to do something but not the finance or manpower to do it.
We recognise that local authority housing teams have been hollowed out. Local authorities need the support to be able to enforce whatever decisions are made. I am hopeful that the Minister can tell us the Government’s thoughts about that. I think asking local authorities to put time and work into these changes, with the necessary finance and manpower, will be a worthwhile investment, because it is about time we turned the tide that we have seen engulfing our communities for so long.
I repeat that we need to draw a distinction with respect to people who have gone about this business in good faith. We do not want to penalise them, or people who have inherited a property and become second home owners by default. We all know that short-term holiday lets are growing in an uncontrollable manner. That is the thing that we really need to stop, especially where big business is involved, because it can rip out the heart of our communities. Our proposals would give control back to local authorities and communities, because that is where, as Liberal Democrats, we always believe that power should lie.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
It is a pleasure to serve with you in the Chair, Mrs Harris. I add my congratulations to the hon. Member for Cities of London and Westminster (Rachel Blake). It is good to see her following in the footsteps of her predecessor, who secured a number of debates and made many contributions on the impact this issue has on that constituency and others. May I also commend the work that London councils have done on behalf of local authorities in the capital to highlight the impact of this issue and bring forward constructive policy suggestions?
There is a high degree of commitment to cross-party working on this issue. As we have heard, it has an impact on constituencies across the country, not just here in the capital, and it was much debated in the last Parliament, particularly during the era of the covid pandemic. We saw many of our constituents who wished to go on holiday or needed to travel for work unable to use hotels, and they therefore made the best possible use of providers such as Airbnb to secure accommodation that met the covid regulations in place at the time.
Many of us worked on the assumption that post-covid there would be a return to the market as we had seen it before, which clearly has not been the case. At the same time, longer-term changes, driven partly by Government but also by wider issues in the market, have seen reducing profit margins for those in the buy-to-let market and people facing higher costs for the standards of the buildings that they maintain. They have also seen the introduction of significantly increased checks on tenants as a result of the need to crack down on unlawful lettings and market changes more generally, as the big players such as Airbnb and Booking.com have sought to create a greater supply of this type of accommodation for commercial reasons.
Clearly, the regulations introduced in 2015—particularly in the capital, with the 90-day limit and the requirement that somebody had to be paying residential council tax on accommodation for it to be let, as well as ensuring that the hon. Member for Kensington and Bayswater (Joe Powell) would not be able to let out his parliamentary office should he wish to do so—are examples of measures taken by Government with a view to ensuring that this market played a positive role in local communities. However, as has been highlighted by many Members, significant issues clearly remain despite those measures and that high degree of cross-party consensus.
As with many things, I put it to the Minister that there will be an opportunity in the Government’s review of the planning system to consider points about the use classes that would apply to property, in particular to introduce requirements around planning consent being sought for those properties that could create a nuisance because of their proximity to other types of residential development, and to ensure that powers that may be enforced are available to local authorities through the planning system.
Markus Campbell-Savours
Is the hon. Gentleman aware that planning authorities can barely wash their own faces, let alone take over the enforcement of thousands of holiday lets? Does he not think that that could be a huge challenge, which could perhaps be better funded through taking money directly from the holiday let operators?
David Simmonds
I started my political career as the chairman of a planning committee in London, and I am very aware of the challenges faced by planning authorities—not just in the capital, but elsewhere.
The design of the system around enforcement is clearly intended to ensure that it is financially self-sustaining; we have seen some examples of that with local authorities, including those that have entered into contracts with the private sector specifically to ensure higher levels of enforcement funded by fines and charges levied against those abusing the system. Not all local authorities have reached the stage where they are prepared to undertake that work, but clearly both the available market in providers and the powers and freedoms that local authorities have enable them to do that if they feel that it is an appropriate and proportionate solution to the level of challenges and concerns that they face in their local community.
We know that the current situation reflects a long-standing determination on the part of Governments of all parties to ensure that there is an increase in the accommodation available. Measures such as Rent a Room tax relief, which was introduced many years ago, were intended to ensure that there was a greater supply of flexible accommodation, so we need to ensure that we strike the right balance in this market.
I finish with some observations about the context of the housing market in which this debate is taking place. The UK has the most intensively used housing stock of any major developed country in the world. We have very few derelict or empty properties, so given the level of demand in comparison with other major economies, it is clearly important that we ensure as far as possible that accommodation is available to those who need it.
An element of that will be short-term lets, which play an important role in the economy, but with many people looking to secure longer-term and permanent housing that clearly needs to be a high priority. In taking forward their planning reforms, I urge the Government to consider the fact that there are already an additional 1.4 million new homes in England with planning consent already granted by our local authorities. Priority should be given to ensuring that those consents are fulfilled and those homes are built, rather than prioritising, for example, the deregulation of the green belt.
I also want to bring something else to the attention of those present. In some respects the previous Government’s record deserves criticism, but on measures for net additional dwellings and new homes per calendar year—both major measures on housebuilding—development under the previous Government hit record levels; in fact, in recent years it hit the long-term record for as long as the statistics have been gathered. Indeed, during the last Parliament, a net additional 1 million new homes were built in England alone, in fulfilment of the manifesto commitment.
Many hon. Members have highlighted lots of issues that need to be dealt with effectively. I would encourage the Government to consider how, through their review of the planning system, those issues can effectively be brought forward. They should also consider how existing measures that have been highlighted, such as enforcement powers and the means of recouping costs, which are already available and used widely by some local authorities, could be put into action more swiftly.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rushanara Ali)
It is a pleasure to serve under your chairmanship, Mrs Harris. I start off by congratulating my hon. Friend the Member for Cities of London and Westminster (Rachel Blake) on securing today’s important debate and highlighting the concerns of her constituency. I have an interest to declare: she is one of my oldest friends. I am proud to see her in her place, making her first speech in Westminster Hall.
I am grateful to Members from across the House for their contributions. They have raised extremely important issues and concerns about the impact of short-term lets on their constituencies. They have highlighted the serious challenges that such lets pose in a diverse range of constituencies, in cities such as London and in rural and coastal communities. They have also highlighted the need for action, but in a way that is appropriate for the different kinds of areas and challenges they face.
Contributions have also highlighted a wider point about housing and housing affordability, a major issue for our country. I hope this debate provides an opportunity for us as a new Government to take on board the many ideas, thoughts and insights that colleagues have shared. If we want to get this agenda right, it is important for us to have an ongoing dialogue.
The key concerns highlighted are around safety, waste management, antisocial behaviour, cost of housing and communities being displaced. That should not take away from the fact that we all recognise the important contribution that short-term lets can make to local economies, but they have to be done in a way that is appropriate and does not cause harm in local communities. The pressures cannot be properly understood without taking into account the impacts of such issues.
I recognise the frustrations that many communities feel, where there is an excessive concentration of the properties under focus and particularly in places where there is an acute lack of affordable housing for local people. I also recognise that short-term lets can cause other concerns for local people, including the hollowing out of communities and antisocial behaviour.
Andrew George
The Minister mentioned the contribution that self-catering short-term lets make to local economies. Hotels, purpose-built short-term chalets and so on also make an important contribution to local economies and often operate at a disadvantage relative to the many individual short-term lets that are operating below the VAT threshold and that in other respects are avoiding making their contribution to the local community or, indeed, national taxation.
Rushanara Ali
I thank the hon. Gentleman for his point. This is why this debate is so important: we must make sure that we address the issues and challenges being raised. The new Government are taking stock and considering a full suite of options for the regulation of short-term lets before we make policy decisions, but I have heard clearly from hon. Members about the issues and challenges they face in their constituencies. We need to ensure that the response is proportionate and appropriate, reflects the different kinds of issues affecting different constituencies, and avoids unintended consequences. The actions we take must properly address those issues.
In England, the average house price is more than eight times annual earnings, and affordability issues are even more acute in the constituency of my hon. Friend the Member for Cities of London and Westminster. The average monthly private rent in London increased by 9.7% last year, and is more than one and a half times higher than the average monthly rent in England. Although it is true that London remains one of the country’s least affordable areas, we are in the middle of a housing crisis right across the country. Years of low house building across all tenures, combined with rising interest rates, have resulted in too few genuinely affordable homes. The issue has been exacerbated in London, coastal towns in places such as Cornwall and areas such as the Lake district by the proliferation of short-term lets and second homes, as hon. Members have highlighted. That is why we want to go further by giving local authorities tools to tackle short-term lets where they are an issue.
The lack of robust data about short-term lets, which my hon. Friend the Member for Cities of London and Westminster mentioned, means that local areas often struggle to define the true extent of the problem and are unable to effectively manage the impacts. Although this data is not perfect, in 2022 a call for evidence suggested that there are about 257,000 short-term lets in England, about 43,400 of which are in London. I know my hon. Friend is keen to have better data about short-term lets in her constituency, and I am happy to hear that she and a number of other hon. Members support the short-term lets regulation scheme. We are committed to introducing the register, which will be an essential tool in enabling local authorities and central Government to access relevant data on short-term lets.
Markus Campbell-Savours
Does my hon. Friend recognise the issues with the registration scheme, which the previous Government described in their consultation as “light touch”? It will not meet the needs of areas such as mine, where we do not have the additional legal powers available in places such as London.
Rushanara Ali
I am grateful to my hon. Friend for his intervention. It is important that we look at what can be done as part of that exercise. He will appreciate the point I made about the new Government needing to take stock of what is working, where the good examples are and what we can draw on. The register is part of that, and I look forward to ensuring that colleagues’ insights and contributions are taken into account.
Rachael Maskell
Will my hon. Friend take a look at my Bill, which proposes a licensing scheme but allows local authorities to determine some of the parameters necessary to control the number of short-term lets in their local area, including control zones, so that we do not see a real expansion of such lets in precious places such as York?
Rushanara Ali
I thank my hon. Friend for the offer on the Bill that she prepared earlier, and I know that officials listening to this debate will consider the range of suggestions and proposals that colleagues are making today.
We know that many local authorities are eager for the registration scheme to be operational as soon as possible. We share this view and officials are currently working at pace to operationalise the scheme. The Department for Culture, Media and Sport is now in the initial phase of a digital development process for the register, which will allow us to test and refine the possible options for design and delivery of the scheme. We will factor into that process the points made today and will update the House in due course.
As hon. Members have highlighted, London is unique in England in having certain powers regarding short-term lets. Since 2015, primary legislation has provided that homes in London that are liable for council tax may be let for temporary sleeping accommodation for up to 90 nights in a calendar year. Planning permission is required to let for more than that. However, as has already been pointed out today, in practice local authorities in London report that this limit is difficult to apply and enforce, due to a lack of data on addresses, ownership and the number of nights that properties are let for, and because of limited enforcement capacity. Points were well made in this debate about other parts of the country that do not have the London scheme.
We recognise that more needs to be done to ensure that authorities in London have the tools they need to enforce the limit. As we design the short-term lets register and consider future policy, we will keep in mind the uniqueness of each area of our country and in particular the interactions with the existing legislation that applies to London.
I recognise that the current taxation of short-term lets can be seen to incentivise such use. The Government have confirmed that we will abolish the furnished holiday lettings tax regime from April 2025, which will remove the tax advantages that landlords offering short-term holiday lets have over those providing standard residential properties.
At the end of July, the Government took concrete steps to abolish the regime by publishing draft legislation, which includes transitional arrangements to help landlords to adjust to the change. Councils will also be able to charge a council tax premium of up to 100% on second homes from April 2025. It is for councils themselves to decide whether to charge such a premium in their area.
Jayne Kirkham
I have just one small point to make about the furnished holiday letting scheme. There are some properties in Cornwall for which there are planning restrictions that say they can only be holiday lets and nothing else can be done with the property, because it may be on the same premises as the first property. I just want the Government to be aware of that when the regulations are developed.
Rushanara Ali
I thank my hon. Friend for her contribution.
Where a short-term let does not meet the relevant lettings criteria, it will usually be considered a second home and will be liable for council tax, including the council tax premium where councils have introduced it. However, we recognise that this may not go far enough towards ensuring that all short-term lets are properly contributing to the local tax system, as the premium will not impact those short-term lets that are eligible for business rates. We will continue to keep the tax treatment of short-term lets under review and will consider what more is needed to achieve our aims.
Short-term lets are just a part of the housing challenge in our country, which is why we are determined to address the issue of affordability and to do what is necessary to get Britain building again.
Andrew George
I thank the Minister for giving way one more time. On the point that the hon. Member for Truro and Falmouth (Jayne Kirkham) made earlier about small business rate relief, could the Minister please make sure that some very strong representations are made by her Department to the Treasury with regard to this issue, because the system is being abused at present? When it was first introduced, it was intended to protect village shops and similar businesses; it was not intended to feather-bed property investors.
Rushanara Ali
Again, those are really important points that will need to be factored in as we develop these policies. The hon. Member will appreciate that I cannot make commitments today, but we are at the beginning of this Government. We are very keen to make sure we get the policies right. I thank him for the intervention.
Richard Foord
The Minister makes a good point about how she and the Government are setting out on a new term and looking at these things for the first time. But the furnished holiday letting regime is set to change in April 2025, so will she consider a pause and looking at that again, given that there has not been any assessment by the Office for Budget Responsibility of what effect it might have?
Rushanara Ali
I am going to make some progress, but perhaps I can write to the hon. Gentleman on his specific point.
I return to the point about short-term lets and the wider housing challenge. Through decisive action, this Government will reform the planning system, because we need to increase the building supply. We have our commitment to building 1.5 million homes over the next five years. We will deliver the biggest boost to affordable and social housing in a generation and establishing a generation of new towns. By doing that, we are improving security for millions of people and unlocking essential economic growth—the growth the country needs. The chronic shortage that the country is facing means that owning a home is a distant reality for many. We are committed to achieving a more balanced distribution of homes by directing them to where they are most required, in areas where they are not affordable. Increased supply will help to moderate house prices over the long term, provide for population growth, and improve quality and choice.
We have introduced the Renters Rights’ Bill, which will end no-fault evictions, and we will lay legislation to further reform the leasehold system. We will open up the dream of home ownership to more people by introducing a permanent, comprehensive mortgage guarantee, and give first-time buyers their first chance to buy new homes. We will publish a long-term housing strategy, which will set out our vision for a housing market that works for all and provides long-term certainty for the market.
In closing, I thank my hon. Friend the Member for Cities of London and Westminster for securing this important debate and for her excellent contribution. I thank hon. Members for their contributions on this issue and assure them that we are very much aware of their concerns. We cannot let short-term lets undermine the availability of affordable housing for people to buy and rent. What is more, we are committed to rebuilding our country by taking the steps needed to fix the foundations of the economy and to ensure that everyone has a place to call home. This agenda is really important. It is vital that we respond appropriately, taking into account the insights that many Members have shared today, and I look forward to working with colleagues across parties. I again congratulate my hon. Friend the Member on securing this very important debate.
Rachel Blake
It has been a real honour to hear the stories of different places across our country. It has been a real privilege to serve under your chairship, Mrs Harris; to be joined by my immediate neighbour and very old friend the Minister, who represents Bethnal Green and Stepney, and by other immediate neighbours, my hon. Friends the Members for Kensington and Bayswater (Joe Powell) and for Vauxhall and Camberwell Green (Florence Eshalomi); and to hear contributions from Members who represent Devon, Kent, Lancashire, Cornwall, Leicestershire, Yorkshire, Sussex and Cumbria. We have been transported to the beautiful landscapes of Morecambe and the lakes, but we have also heard about some of the damage that short-term lets are doing to our communities and how challenging it is to take the action that we need.
I have particularly reflected on the following themes: the risks of depopulation and badly managed tourism, what is happening to the market and the challenges of enforcement in such a complex environment. This debate has clarified how important a localist, devolved approach will be. We have heard compelling and thoughtful contributions on the differences between the self-catered holiday let sector and traditional bed and breakfasts and hostels, and the risks there are to depopulation and otherwise thriving tourism industries if we get this wrong. We heard about the scale of the market impact, properties where rents could be as much as three times lower than the income from short-term lets, and just what that is doing to distort local housing markets.
I am struck by the challenge of effective enforcement and the fact that we have such a complex environment in which private landlords are unable to take action on their tenants. The urgent need for leasehold reform means we can get clarity and ensure we take action by delivering on the Renters’ Rights Bill. I am heartened that we can move forward on this issue. Hearing the Government’s commitment to make progress with a registration scheme is encouraging.
We need to think more about a licensing scheme. I shared some details about a unique property reference number and the importance of making sure that we have data available. I also welcome the idea of a toolkit. I foresee an opportunity with the devolution Bill and the publication of the national planning policy framework to make real progress on this issue to protect all our communities and contribute to tackling the long-term homelessness crisis in this country.
Question put and agreed to.
Resolved,
That this House has considered the regulation of short-term lets.