The Government intends to permit short term lettings of residential premises in London for up to 90 days per calendar year which is a relaxation of the current restrictions. Laura Bushaway examines the proposals.

The Department for Communities and Local Government (DCLG) has this month published a policy statement on short term use of residential property in London entitled “Promoting the Sharing Economy in London”.

In London there are currently restrictions on short term lettings of less than 90 consecutive nights which require planning permission under Section 25 of the Greater London (General Powers) Act 1973. Failing to comply can attract a penalty fine of £20,000 for each offence of failing to secure planning permission. Outside London, however, there are no such restrictions and residents can let their homes for short periods.

Even though it is potentially a breach of the current legislation, many Londoners are letting their properties on a short term basis and there has been a large growth in internet sites facilitating short term lettings such as “airbnb”. However, the current restrictions have been criticised for being outdated and inconsistently enforced across local authorities in London. DCLG indicates that the Government wants to give Londoners the opportunity to be able to participate fully in the sharing economy and be part of this modern approach by relaxing the current restrictions.

The proposals are to restrict short term letting to a maximum of 90 days in any one calendar year. DCLG believes that the 90 day cap will prevent the properties being used as temporary sleeping accommodation on a permanent basis.

In addition, the Government intends to build the following safeguards into the new rules:-

  1. Clear arrangements for the enforcement of the new provisions including a power to withdraw the arrangements from particular properties if enforcement action has been successfully taken, even after the first enforcement action. DCGL recognise that presently local authorities tend to focus enforcement action upon permanent short term use.
  2. The power for local authorities to request a localised exemption to the new rules in exceptional circumstances.
  3. Enabling only those properties liable to pay Council Tax to benefit from the new rules.

There have been some concerns raised about the proposals by residents who fear that their buildings will suffer an increase in noise and disturbance if home-owners are granted more freedom to let their properties on a short term basis. It is important to note that the proposals relate only to regulatory sanction and will not affect contractual arrangements relating to a particular property. Therefore, it remains important for residents and leaseholders to check their own leases/tenancy agreements and mortgages to confirm whether there are any restrictions on use or sub-letting on a short term basis.

Landlords who are concerned about the impact of short term lettings on their properties should ensure that any new leases which are granted contain sufficient provision restricting sub-letting on a short term basis.