Warnings that more rental properties in Westminster could be lost to Airbnb

By Adrian Zorzut, Local Democracy Reporter

Allowing more landlords to turn their homes into Airbnb-style short-term lets before new regulations come into force could see thousands of London homes taken off the market for private rent.

The warning comes from a real estate body and is echoed by Westminster City council leader Adam Hug.

Propertymark boss Nathan Emerson said he expected a surge in people turning their homes into short-term lets before new rules come into force that require them to go through a formal registration process.

It could see private rental costs soar even higher because it would cause a further shortage of homes to rent as people seek to make money from letting out their homes to people visiting London on short trips and holidays.

He said: “There are already great concerns regarding supply levels across the whole of the UK in the private rented sector, so a further exodus of landlords could well be detrimental.

“Some tourist hotspots are being majorly affected by an increase in short-term lets as tenants are struggling to find a property that they can rent in the long-term.”

The warning comes as Westminster City council said landlords may use a loophole in the law to turn thousands of homes permanently into short-term lets to avoid a looming crackdown on abuse of the system.

Cllr Hug said more than 10,000 homes could be lost from the residential market in the central London borough if landlords whose properties currently fit the bill of a short-term let get the chance to automatically qualify for a new property class, as is being proposed by the Government.

He said: “The Budget did offer the prospect of some tightening up on the rules around short-term lets, which we welcome. However, the reality is the Government’s main plans contain a generously sized escape hatch for short-term lets for landlords who want to escape any planning regulation at all.

“Our fear is that this will effectively rob the private rented sector of more than 10,000 rentable homes in Westminster. The real losers in this will be people looking to rent properties who now have even less chance of finding a home.”

The Labour council leader said Airbnb-style lets had made the lives of locals “a misery” with visitors taking a flat for the weekend and generating large amounts of noise and rubbish for the council to clean up. He added: “We receive constant complaints from residents for whom this is the reality of a short-term let market out of control.

“As the popularity of short-lets reaches pre-pandemic levels, we need a thorough overhaul of the law – not a cosmetic tinkering which gets us no further on.”

The Chancellor last week announced a tax clampdown on second-home owners who rent their properties for tourists. Jeremy Hunt scrapped a tax incentive which allowed landlords to deduct the full cost of mortgage interest payments from their rental income.

And in February, housing secretary Michael Gove announced laws that would require people letting out their property as a short-term holiday home to seek permission from the local council under a new category and a new national register.

The Department for Levelling Up, Housing and Communities said the changes are part of a long-term plan to prevent a “hollowing out” of communities and address antisocial behaviour. It said a new mandatory national register will give local authorities the information they need about short-term lets in their area.

They said to recognise this, homeowners will still be able to let out their own main or sole home for up to 90 nights throughout a year without planning permission. The proposed planning changes would see a new planning ‘use class’ created for short-term lets not used as a sole or main home.

Westminster City council said that since the start of 2024, the council has served 86 planning contravention notices on houses and flats suspected to have operated as short-term let for more than the 90 nights in a year, and housing officers are currently running 500 active investigations.

Picture: Pixabay/Peggy