Londoners will be able to earn thousands of pounds by renting out their home short-term under a controversial “Airbnb” letting revolution.
For up to three months a year, they will be allowed to let out their house, flat or spare room on a short-term basis under new rules unveiled by ministers today.
The proposed reforms also aim to offer millions of tourists the chance to “live like a local” in London.
Currently, homeowners in the capital are banned from letting out their property for less than three months, under the Greater London Council Act 1973, unless they have planning permission.
The legislation aimed to protect the housing supply in London.
But ministers are seeking to ditch this limitation, under the Deregulation Bill, so Londoners can benefit from the Government’s “sharing economy” drive.
The shake-up, though, has faced a backlash including from people who fear their block of flats will effectively be turned into hotels and blighted by noisy parties, more crime and rubbish.
Other objections were over the risk of losing family housing from the main rental market and community cohesiveness being damaged.
Eight boroughs raised concerns.
So ministers have proposed a series of rules to address these worries including:
- Homeowners would only be able to rent out their property as a short-term let for up to 90 days a year to stop such lettings being done on a commercial or permanent basis.
- In “exceptional circumstances”, town halls will be able to ask the Secretary of State to agree to small localised exemptions from the new flexibility, where there is a strong case to do so.
- Properties must be liable for council tax so business premises will not be covered.
- Councils will be able to exempt properties where the owner breaches the regulations.
“London is one of the world’s top holiday destinations. Draconian rules dating back 40 years prevent the capital’s homeowners from renting their properties to tourists,” said housing minister Brandon Lewis.
“That’s why I want to change the law, and free Londoners up to rent out their homes.”
Thousands of properties in London are currently being advertised for rent on websites such as Airbnb and many properties were let out by Londoners during the 2012 Olympics for a few weeks, and are during the Wimbledon tennis tournament.
According to Airbnb, its typical UK host earns £2,822 a year by letting their property for 33 days.
But Londoners who rent out their properties for short stays, without planning permission, could be at risk of a fine of up to £20,000.
The Communities Department, though, stressed this law was being inconsistently enforced, leading to confusion and uncertainty for householders.
It also highlighted that the internet had opened up the rental market and so London had to “catch up with the 21st Century way of living.”
“Residential homes provide a different type of accommodation from the average hotel or guesthouse,” it added ahead of the Deregulation Bill being debated in the Lords this week.
“Renting a room in a person’s home or renting their home while they are away provides the opportunity to travel and live like a local.”
The relaxation of the rules is not just restricted to homeowners.
But Londoners will have to check their mortgage clauses, or tenants their leasehold or other agreements, to ensure whether they are permitted to rent out their property.
Fraud investigators are already targeting social housing tenants in Camden suspected of breaching rules by sub-letting their homes to tourists.
A probe was also launched in Kensington & Chelsea last year after a £500,000 housing trust property was allegedly being rented out for £155 a night.
Ministers believe the proposed changes will increase the amount of competitively priced accommodation available for tourists to rent, financially benefit Londoners, boost income from tourism and cut the amount of underused and at times empty properties.
They could also help people working temporarily in the capital or looking for somewhere to live.
Karen Buck, Labour MP for Westminster North, had warned thousands of properties in her constituency could be taken out of the rental market for local people by relaxing the regulations to encourage more short-term lets.
She said the new rules appeared to be “modest concessions”, adding on the possibility of appealing to the Secretary of State: “We will need to look very closely at what that exemption is going to mean in practice.”
The authorities in Paris are so worried about the drain on residential property caused by websites such as Airbnb that they have enacted drastic measures to bring it under control.
Ian Brossat, director of housing at City Hall in Paris, has said the repercussions on the French capital’s residential market are severe.
“There is already a serious shortage of flats in Paris, especially studios and two-room apartments where couples might start a life together,” he said.