Ladybird Living – Your London Estate Agent
New Short-term let regulation
There have been proposed changes to short-term lets across England, Scotland, and Wales. We can expect to see new tax rules, licensing and a holiday-let register being introduced later this year. Such changes are necessary to alleviate the pressure on property owners within the private rented sector.
Why is the government planning to regulate short-term lets?
Since the issues surrounding housing supply across England, Scotland and Wales ,the government has decided to respond by increasing policies to regulate short-term and holiday lets.
Ben Beadle (Chief Executive of the National Residential Landlords Association) has said that more property owners were ‘incentivised’ to join the short-let sector, “to the detriment of long-term sustainable renting.” In his view, the government should take responsibility for the issues that have arisen regarding the rented housing supply.
A survey conducted by Propertymark has shown that 69% of agents believe that the increased number of short-term lets will have serious negative consequences for the private rented sector.
New criteria to qualify for business rate relief on short-term rentals:
The government has set out new criteria for accessing benefits of renting on a short-term basis. It is now a requirement for second home owners in England and Wales to provide evidence that they have let their properties out for at least 70 days per year. It is also a requirement for the property to be available to let out for at least 140 days. If such evidence is provided, then they will qualify for business rate relief on their short-term rentals.
To continue benefitting from these benefits, the threshold must have been met in the 2022 – 2023 tax year.
What is the purpose of introducing the tourist accommodation registration scheme in England?
The government has proposed a tourist accommodation registration scheme in England. The aim of this scheme is to:
- Define the size of the sector
- The impact on long-term stock levels
- The impact of the new policies
Many sources have estimated how much the holiday let sector has grown over the years. According to the BBC, there has been a 40% increase in holiday lets between 2018 and 2021.
Conclusion:
The holiday-let sector is continuously on the rise. The number of holiday-let mortgage options have doubled from October 2022 to January 2023. The new regulations may change this as we may see holiday lets becoming less popular in the future.
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