Short Let Deregulation (London)

Brandon Lewis Excerpts

Wednesday 7th January 2015 Westminster Hall

[The Minister of State, Department for Communities and Local Government (Brandon Lewis)]

The Government, through the legislation we are considering, are taking forward proposals that will tackle out-of-date legislation from the 1970s. Section 25 of the Greater London Council (General Powers) Act 1973 makes it illegal for London residents to rent out their homes to visitors on a short-term basis. Londoners who want to rent out their homes for less than three months are required to apply for planning permission from the council. That burden does not apply anywhere else in the country. We want just to update that legislation, to give London residents the freedom to let their homes on a short-term, temporary basis without the unnecessary cost and bureaucracy of applying for planning permission. We also want to ensure that we maintain the important provisions for the protection of London’s housing supply and residential amenity. That goes directly to the point raised by the hon. Member for Westminster North (Ms Buck), and I will come back to that in a few moments.

Section 25 provides that the use of a

“building, or any part of a building”

for “temporary sleeping accommodation” for less than 90 consecutive nights is a change of use, for which planning permission is required. London local authorities can take enforcement action against an unauthorised change of use. As a result, London residents failing to secure planning permission face a possible fine of up to £20,000 for each offence.

Clause 33 of the Deregulation Bill grants a power for the Secretary of State to make regulations in respect of short-term letting. Our intention is that regulations will set out the circumstances in which temporary sleeping accommodation in London would not require planning permission. It will also allow for the exclusion of particular residential premises, and residential premises in particular areas, from any relaxation of section 25.

We all know that the internet is creating a new world in which to live and do business. It has made it much easier for people to rent out their property; references have been made to Airbnb, for example. It allows residents to supplement their incomes and offer new experiences for consumers. Last summer, nearly 5 million overseas visitors came to the capital. Some of those visitors, as well as British residents, want to experience London as a local. That means staying with Londoners who live in London permanently, or in their homes while the resident is away on holiday. We know that thousands of London properties and rooms are currently advertised on such websites. However, each of them is potentially in breach of section 25 as it stands. There is uncertainty for householders as to whether their local authority will take planning enforcement action against them for unauthorised short-term letting.

[Ms Buck]

Does the Minister have evidence of local authorities taking enforcement action and fining home owners who simply let out their home for two weeks here and there, perhaps for a home swap or something similar?

[Brandon Lewis]

That is the point I was making. There is an uncertainty for residents if they do not know whether any given local authority would take action. If the local authority is not using that power, however, it will not miss it after the change in the legislation.

Planning legislation for the capital needs to catch up with our 21st-century way of living. Every year, thousands of visitors enjoy their holidays in Londoners’ homes. Such short-term letting already supports major events, such as tennis at Wimbledon. Our proposals will not only benefit London’s strong tourism industry by expanding the competitively priced accommodation offer; it will allow families to earn some extra income by making their home or spare room available to visitors. It offers an alternative to hotels and guest houses, so it can support the wider tourism industry. In addition, such accommodation helps those who are temporarily working in the capital or searching for a place to live by expanding the pool of competitively priced accommodation.

Residential homes provide a type of accommodation that is different from the average hotel or guest house. Renting a room in a person’s home, or renting their home while they are away, provides an opportunity to travel and live like a local, and it caters for a different type of client. Websites advertising householders’ rooms and homes indicate that a wide variety of accommodation is available in different locations, many of which are outside the central hotel zones.

[Mr Slaughter]

I do not think anybody objects to people renting out rooms in their homes. In any event, such people will not be caught at the moment. I do not think anybody objects to people renting out their property for Wimbledon or when they are away on holiday. The problem is the commercial, organised letting of large numbers of flats in single blocks, which effectively turns residential blocks into hotels or “aparthotels”. That is what we want local discretion to prevent.

[Brandon Lewis]

I suspect, therefore, that the hon. Gentleman will be pleased to support the Government’s proposals. If he looks back at my opening remarks, I think that that will deal with some of his concerns. I will go a bit further in a second.

London is a great city, as the hon. Member for Westminster North has outlined. Our proposed step forward gives Londoners the opportunity to be part of a huge industry and supplement their income. We want to be leaders, not followers, and we want to open up our great global city even further. Where other cities and countries may wish to shut down, we want to move forward.

I want to make it clear that through our reforms we want only to give London residents the freedom that is enjoyed in the rest of the country: to let out their homes on a short-term, temporary basis without the unnecessary cost and bureaucracy of applying for planning permission. We do not seek to provide new opportunities for short-term letting on a permanent or commercial basis. We fully recognise that London’s homes should not be lost to investors who will use them exclusively for short-term lets, and our reforms will not enable that. Through regulations, we want to provide certainty and consistency for residents in all London local authority areas. We want them to know when householders will be permitted temporarily to short-term let their property without the need for planning permission. The regulations we will introduce will clarify for London residents what is permissible, so they can be confident they are within the law. We will look to strike an appropriate balance between allowing freedom for occasional short-term letting by residents, as well as—this goes directly to the point made by the hon. Member for Hammersmith (Mr Slaughter)—maintaining the important provisions of the existing legislation to protect London’s housing stock.

I know there are concerns that our deregulation of section 25 could lead to a loss of permanent housing stock for Londoners at a time when London needs more new homes. However, as we seek only to allow residents to let out their homes while they are away, those properties will not be lost to the short-term rental market from London’s permanent housing stock. We will not be providing new opportunities for short-term letting on a permanent or commercial basis.

[Ms Buck]

This is the heart of the worry. If it is difficult now for local authorities to enforce against properties they believe are part of the short-term letting sector when one merely has to prove that that is the case, will it not be far more difficult to enforce when the local authority has to demonstrate that the property has not been let for more than 90 days?

--- Later in debate ---

[Brandon Lewis]

Our proposals are designed to ensure that we bring things up to date, which is why I have said that we want to make sure that we get the regulations right. It is important that we move forward and allow people to have the right flexibility. We must not be scared away from doing the right thing because something has been done incorrectly in the past. We want to move this forward and get it right for the future. We must recognise the world in which we now live, rather than harking back to something from the past that did not work.

As at present, it will still be open to property owners to seek planning permission from their local authority if they want to change the use of their premises. It will also, therefore, remain for local planning authorities to determine whether an unauthorised change of use has taken place and whether they should take planning enforcement action in the public interest, so that protection remains.

It has been suggested that our proposals might lead to an increased loss of amenity for London residents as a result of people’s behaviour. Reference was made earlier to antisocial behaviour in neighbouring accommodation on a short-term basis. Our proposed reforms will do nothing to weaken the duty on a local authority to investigate such complaints of statutory nuisance from people who live in its area, or to take action against those responsible.

I know there are concerns that people who currently short-term let property through internet sites are somehow permitted to circumvent not only section 25 but other vital measures, such as health and safety regulations and fire orders. That is not the case. I can confirm that our proposed change to the legislation will not provide a short-cut to important protections, beyond allowing householders temporarily to short-term let their property without applying for planning permission. Clause 33 of the Deregulation Bill provides a regulation-making power. The regulations will be subject to the affirmative process for statutory instruments following Royal Assent, which will enable Parliament to scrutinise the detail of the proposed deregulation. We recognise that there is considerable interest in ensuring that we get the changes right. We will continue to work closely with the London local authorities to ensure that the measures brought forward meet householders’ aspirations of temporarily letting out their homes or spare rooms but that, importantly, they retain the key purpose of section 25, which is to keep London’s homes for those who live and work permanently in London.