Short and Holiday-Let Accommodation (Registration) Bill

Karen Buck Excerpts

1st reading
Wednesday 23rd March 2022 Commons Chamber

[Ms Karen Buck (Westminster North) (Lab)]

I beg to move,

That leave be given to bring in a Bill to establish a national register of short and holiday-let accommodation; to give local authorities powers to require information in association with that register; and for connected purposes.

Over the last 10 years or so, the opportunities offered by the digital economy have transformed the world, much of it for the good. The sharing economy that digitalisation has opened up—from ride sharing to home sharing—has brought many benefits, but deregulation often has its downsides, and the short let and sharing accommodation sector is no exception. From the heart of London, where Government deregulation after 2015 has contributed to an explosion in short lets, to coastal resorts and towns and cities the length and breadth of the country, short or holiday lets—often referred to generically by the name of the largest such company, Airbnb, but actually spreading far beyond it—are an issue that now requires effective management.

This is not, of course, about banning owners from renting out rooms or even their whole properties in line with how the sharing economy was originally conceived. Owners can earn valuable money, put empty space to good use and contribute to their local tourist economies, and all of this is welcome. To give praise where it is due, Airbnb and many short let hosts made a very significant contrition during covid and are now engaging over the Ukrainian refugee crisis, and I absolutely give them credit for doing that. But the sharing economy is not really where we are now, because increasingly we are dealing with a fast-growing industry that is highly commercialised and operating at scale. For example, a report in 2020 found that just 12.5% of Airbnb’s revenue came from the kind of home sharing let that was its original concept. In the face of that, we must take action to manage the sector constructively but effectively.

Three key themes now lead to the pressing need for action, including registration of the sector so that we know who is letting property, where they are letting it, and for how long. The first concerns the impact on housing supply—that is, places for people to actually live. It is clear that the short let tourist accommodation sector is now dominated by whole property lettings in many areas, including owners with multi-property listings. That suggests a significant shift into that market by individuals and businesses who would otherwise be in the residential lettings market, or making property available for sale.

Before the covid-19 pandemic, Westminster—my borough—had the highest proportion of entire homes listed on online short lettings sites, currently standing at 13,039. In his research, academic Tom Simcock of Edge Hill University found there had been a 423% increase in the number of multi-host entire apartment lettings between 2015 and 2019. That equates to just over 4,400 properties in London alone being let by hosts with multiple listings. Nearly four of out every five lettings in my borough were for whole homes, with a similar figure for Kensington, and more than 60% in Camden and Hammersmith. Four out every 10 hosts in my borough listed multiple properties, with the numbers nearly as high in Camden and Brent.

This is, of course, a national issue, although some of the rules on planning permission requirements vary between London and the rest of the country. The House of Commons Library briefing from a few weeks ago referred to a 661% growth in short lets in Cornwall over just five years, and colleagues in towns and cities across the country, from York to Cambridge and from Plymouth to the Lake district, recognise that pattern. What it means in practice is that an ever growing share of properties in a number of locations are unavailable for anyone to live in. No one planned that, or discussed what the implications might be, but it has happened.

The second theme concerns the near impossibility of enforcing the rules that exist. The deregulation of London’s holiday let market from 2015 onwards not only made it substantially easier to let out property on that basis, but made the task of monitoring and managing breaches of the rules harder and costlier for local councils. There is ample evidence that some hosts have engaged in routine short-term letting for longer than the 90 nights a year permitted in London, despite Airbnb’s introduction of a 90-day limit on its platform. The BBC has been among those investigating the extent to which agencies and landlords have bypassed the controls introduced by Airbnb to deliberately flout the 90-night limit and engage in short-term letting activity above 90 nights without planning permission. Research carried out for the Greater London Authority estimated that more than 11,000 properties were let in breach of London’s 90-day-a-year rule, yet in 2019-20 my borough of Westminster issued only 49 enforcement notices.

Local authorities across London—and, I am sure, across other parts of the country—both Labour and Conservative, have faced significant challenges with the funding and technology needed effectively to regulate and enforce measures against short-term landlords in breach of the rules. London councils, the Mayor of London, and local authorities elsewhere, are left to pick up the pieces, spending scarce resources and frustrating residents who bring forward complaints about which local authorities are unable to take any action. Currently, more than 2,000 live short-term lets are being monitored by Westminster City Council alone for suspected breaches of the rules.

That leads to the third dimension of this issue, which is the extent to which short-term and holiday lets can contribute to nuisance, thereby requiring local agencies, from the police to local authorities, to devote time and money to responding on behalf of neighbours. Such nuisance can include, as my own council has indicated, crime and antisocial behaviour, prostitution, noisy parties, housing benefit fraud and drugs trafficking. Indeed, there is a growing consensus that there is a serious problem with criminality at the bottom end of the short let market. Excessive quantities of commercial waste are generated, which is often misclassified as domestic waste and not paid for. Another issue is regular unlicensed music events and noise. In the first six months of 2021, during lockdown, the council identified 83 short lets purely as a consequence of their being locations for unlicensed music events.

Unsurprisingly, the leader of Conservative-controlled Westminster—so this is a cross-party point—says that

“irresponsible short-term lets are making life hell for residents and causing a strain on council resources”.

My own casework confirms that. Residents in apartments and mansion blocks describe noise, nuisance and security fears as the place they used to call home now bears all the characteristics of a hotel, but with none of the safeguards.

Finally, the growth of the short-term let industry has created an uneven playing field in the hospitality sector, with traditional providers such as hotels required to bear the costs of business rates and corporation tax, and comply with regulations, not least in respect of health and safety, whereas short-term let owners do not. My own council points to one striking example: before the pandemic, Park West apartments close to Hyde Park had more rooms available for short-term letting than exist in the whole of the Ritz hotel. The Ritz hotel pays £2.27 million in business rates annually. The combined council tax bill of the Park West apartments that we know are used for short-term lettings is £92,686.

Here we are, seven years after the deregulation of the sector in London—five years after I last introduced a Bill to encourage regulation—and with a generally deregulated sector in the rest of the country, but still no action from the Government. We are promised a consultation on a registration scheme, but we need action. I stress again that I do not want a ban, because there are proven positives to short lets in respect of personal incomes and local economies, but we need a registration scheme so that everyone letting out their property in this way can be identified, and the minority with tenants with problematic behaviours can be held easily to account. As the Mayor of London has proposed, such a scheme would need to be nationwide and mandatory, to track properties being let across platforms, require proof of ownership and proper identification of the letting landlord. Those are not onerous requirements but they would make a significant difference.

Requiring all landlords to be registered in order to provide short-term lets would make recourse to justice easier for victims of crime. If the criminal landlord was not on the register, they would already be on the back foot. It would help ensure councils could monitor breaches of the rules and act swiftly to deal with noise, waste and other nuisance. We have waited too long for a response to this growing problem, and the Government need to act now.