England’s New Short-Term Rental Registration Process
The UK government has recently announced it will roll out a new initiative aimed at regulating and enhancing the short-term rental market: the Short-Term Rental Registration Scheme.
In addition to this there will be a new planning class for short-term rentals. At the earliest, these are expected to be rolled out later in 2024.
What is the Short-Term Rental Registration Scheme ?
This scheme, initiated by the UK government, requires all short-term rental property owners in England to register their properties with local authorities. The move aims to ensure that these short-term rental properties meet certain safety and quality standards.
Key Features of the government’s proposals
Mandatory Registration and a new planning class: Property owners offering short-term rentals will need to register their properties with their local council. This includes providing essential information about the property and its ownership. It’s likely if the property isn’t the owners main residence then an application for the new planning class will be required.
Safety Standards: The scheme emphasises safety, requiring property owners to adhere to specific safety standards to ensure the well-being of guests. This may include fire safety measures, gas and electrical safety checks, and more.
Quality Assurance: Beyond safety, the scheme also aims to maintain a certain level of quality across short-term rental properties. This could involve cleanliness standards, basic amenities provision, and adherence to local zoning regulations.
Transparency: The registration process aims to bring more transparency to the short-term rental market, making it easier for local authorities to obtain data.
Implications for Property Owners
For property owners involved in short-term rentals, this proposal brings both opportunities and responsibilities.
While registration may add an extra layer of bureaucracy, it also signals a commitment to professionalism and accountability within the industry.
Adhering to safety and quality standards not only ensures compliance with the law but also fosters trust and satisfaction among guests, potentially leading to higher occupancy rates and positive reviews.
At Stayful, we have long worked with industry bodies to request for more clarity and guidance whilst recognising the important role the industry can play economically.
We welcome these proposals and recognise the government’s willingness to work with the industry when consulting on this issue.
Who will be excluded from the changes?
The regulations won't impact individuals renting out their primary residence for less than 90 nights annually. Hotels, hostels, and bed and breakfast establishments remain unaffected by these adjustments.
Existing short-term rentals will be automatically reclassified.
Why is this change pushed by the government?
The government stated that these modifications aim to simplify the search for affordable housing in areas with a significant number of short-term rentals, preventing the "hollowing out" of communities.
Furthermore, the new national register is intended to provide local councils with comprehensive information about short-term rentals in their respective areas. This data will aid councils in understanding the impact on communities and ensuring adherence to health and safety regulations.
Members of Parliament representing renowned holiday destinations such as:
Cornwall,
The Lake District
Norfolk
have previously advocated for stricter regulation. They argue that the surge in short-term rentals has created difficulties for residents in securing affordable housing.
How has the short-term rental registration scheme in England been received so far ?
The registration scheme has generally been well-received and is a great step forward towards the authorities gaining accurate information to inform their planning decisions, ensuring a more informed and effective approach to addressing potential problems.
It provides essential data that enables local authorities to identify and address issues with the STR providers who just don’t provide safe and relevant standards of services.
Why could the new planning permission regulation be problematic for Short-Term Rentals owners or operators?
The new regulations being introduced in just mere months (from the summer of 2024) may mean that some of the decisions could potentially be rushed and not fully researched.
Also, there could be confusion in the future about the definitions for hotels, hostels, B&Bs, and Serviced Apartments - and which properties fall into which category.
These regulations will likely have a significant impact on popular holiday areas that are already seeing a considerable shift from residential to short-term rentals.
The standard stance will be to grant the planning permission by default. However, new legislation will transfer the decision-making authority to local councils, giving them the power to revoke "permitted development rights" in areas heavily impacted by short-term rentals.
Read more about the new regulations:
Read the official government press release about it here.
Stayful’s opinion on regulation around short term rentals & Airbnb
Their are downsides and upsides to this issue, i am going to address both.
Upsides
Increase property value - This will increase the value of properties which are allowed to be short term rentals, as not every property will be able to do so.
Control of competition - It will make it much harder for new competition to compete against you in area’s which you operate in, creating a MOAT around your business.
Regulation will not be that restrictive - Ultimately Airbnb is a business, the market will decide the saturation point as profitability of the business will decrease and drive people away, this is very different to the private rental sector which is much less of a business then Airbnb.
Downsides
Hard to expand - This will make adding to your portfolio much more difficult.
Leasehold properties may not exist on Airbnb - as really you will need to change the use of the property, most freeholders will not let you do this.
R2R may not exist - If you have to change use of your property and you do not own it, the odds of this being able to happen is unlikely.
R2R deal sourcing for SA may not exist - For the same reason R2R may not exist the same will apply to sourcing these types of properties.
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