Title: The Growing Concern Over Second Homes and Short-Term Rentals in London
Introduction:
The number of second homes in London has continued to grow despite the impact of the pandemic and reduced overseas demand for short-term rentals. This has raised concerns among housing advocacy groups and government officials, who are calling for stricter regulation and government action to address the issue. The lack of effective regulation poses a threat to affordable housing and exacerbates the housing shortage in the city.
The Surge in Second Homes:
Data compiled by campaign body Generación Rent has revealed a significant increase in the number of second homes in London. Several boroughs, including Southwark, Hammersmith and Fulham, and Enfield, have witnessed a surge in the count of non-primary residences. For instance, Southwark saw an alarming increase from 523 to 2,951 second homes during the pandemic.
The Ineffectiveness of Regulation:
The small percentage of registered vacation rentals compared to the total number of second homes highlights the ineffective regulation of the sector. Many homeowners exploit loopholes by registering their properties as second homes instead of short-term rentals to pay lower council taxes. This creates an unfair advantage and contributes to the scarcity of affordable housing for local residents.
The Impact on Housing Availability:
The proliferation of short-term rentals and second homes limits the housing options available to local residents. The Mayor of London, Sadiq Khan, has expressed concerns about the negative effects of short-term rentals on London’s severe housing shortage. The proposed planning reforms and mandatory registration of short-term rentals are seen as crucial steps towards safeguarding the supply of permanent housing.
The Need for Stricter Regulation:
Housing advocacy groups, such as Generation Rent, are advocating for more regulation of second home use. They argue that existing planning rules are difficult to enforce and call for a licensing scheme that controls the total number of houses used as short-term rentals. This would help prevent property prices from skyrocketing and ensure a fair distribution of housing resources.
Calls for Government Action:
Government officials, including Sadiq Khan, have echoed the need for government intervention to address the issue of second homes and short-term rentals. They have proposed measures such as a council tax premium on second homes and granting greater powers to local authorities to enforce regulations.
Summary:
Despite travel restrictions and the pandemic’s impact on the demand for short-term rentals, the number of second homes in London has continued to rise. This growth has sparked concerns among housing advocacy groups and government officials about its impact on affordable housing availability. The small percentage of registered vacation rentals compared to the total number of second homes indicates ineffective regulation. Homeowners exploit loopholes to pay lower taxes, exacerbating the scarcity of affordable housing for local residents.
To address these concerns, advocates are calling for stricter regulation, including a licensing scheme and mandatory registration for short-term rentals. Government officials are also urging action, proposing measures such as a council tax premium on second homes and giving local authorities greater powers to enforce regulations. The need for government intervention is crucial to protect the supply of permanent housing and prevent further housing shortages.
Additional Piece:
Title: Finding a Balanced Approach to Second Homes and Short-Term Rentals in London
Introduction:
The issue of second homes and short-term rentals in London presents a complex challenge that requires a balanced approach. On one hand, these properties contribute to the local economy, provide additional income for homeowners, and offer flexibility for visitors. On the other hand, they exacerbate the housing crisis, driving up prices and limiting affordable housing options for residents. Finding a solution that ensures a fair distribution of resources without stifling the benefits is crucial.
Understanding the Impact:
The surge in second homes and short-term rentals during the pandemic highlights the need for better regulation. While some argue that these properties stimulate tourism and support local businesses, it is essential to evaluate their impact on housing availability and affordability. Balancing the needs of tourists, homeowners, and local residents is a delicate task that requires collaboration between government authorities, housing advocacy groups, and the hospitality industry.
Stricter Regulation and Enforcement:
To address the issue, stricter regulation and enforcement are necessary. This includes implementing a licensing scheme that ensures second homes are used responsibly and not solely for short-term rentals. Furthermore, mandatory registration of short-term rentals can help monitor the number of properties available and ensure they comply with local regulations and taxation policies.
Supporting Affordable Housing:
Efforts to address the shortage of affordable housing in London must go hand in hand with regulating second homes and short-term rentals. The government should prioritize the construction of affordable housing units while incentivizing homeowners to contribute to the long-term rental market. This could be done through policies such as tax incentives or subsidies for landlords who offer long-term rentals instead of opting for short-term rentals or keeping vacant second homes.
Promoting Responsible Tourism:
To strike a balance, promoting responsible tourism is crucial. Encouraging tourists to stay in designated accommodations, such as licensed vacation rentals or hotels, can help mitigate the impact of short-term rentals on the housing market. Providing transparent information to visitors about the importance of supporting local communities and the benefits of staying in regulated accommodations can lead to more conscious choices.
Conclusion:
The issue of second homes and short-term rentals in London requires a comprehensive approach that considers the needs of all stakeholders involved. Stricter regulation, enforcement, and support for affordable housing are vital for addressing the housing shortage while preserving the benefits of tourism. By finding a balanced approach, London can ensure a sustainable housing market that benefits both residents and visitors alike.
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Figures have called for government action on holiday rentals after it emerged that the number of second homes in London grew during the course of the pandemic.
Information compiled by the campaign body Generación Rent showed that the capital’s city councils had registered more places as furnished but not main dwellings in October 2022 than in the same month of 2019.
This is despite travel restrictions that reduced overseas demand for short-term rentals and a race for space that dampened national interest in London property.
Southwark’s second home count soared from 523 before Covid hit 2,951 last autumn. In Hammersmith and Fulham, the total grew by 38 percent in three years to 2,688. Enfield’s stock of non-primary residences increased by more than half to 1,691.
Top 5 Districts for Second Home Growth
|
Borough of London |
Second homes in Oct 2019 |
Second homes in Oct 2022 |
Increase |
|
Southwark |
523 |
2,951 |
2,428 |
|
Hammersmith and Fulham |
1,946 |
2,688 |
742 |
|
enfield |
1,097 |
1,691 |
594 |
|
Greenwich |
302 |
786 |
484 |
|
croydon |
408 |
707 |
299 |
Source: Generation Rent analysis of municipal tax figures
Although some boroughs saw sharp drops in second home ownership over the same period (there were 1,076 fewer in Kensington and Chelsea and a similar drop in Barnet), the total number of second homes in London rose half a percentage point to 46,158 in October. past.
Dan Wilson Craw, interim director of Generation Rent, warned that the surge seen even during the worst of the pandemic highlighted an imminent threat to resident renters.
“The low-tax, unregulated vacation rental industry is out of control,” said Mr. Wilson Craw. “Much of the solution to high rents is more home construction, but locals won’t see the benefits of this if houses continue to trickle down into the vacation home sector.”
The small proportion of second homes officially registered by districts as vacation rentals (just 0.3 percent of the total in 2022) also showed how ineffective regulation of the sector was, Wilson Craw said.
Many homeowners used second home status instead of classifying their properties as short-term rentals to pay council taxes instead of more expensive business rates, he alleged.
Just 122 short-term rental properties were registered in London, Generation Rent found. To be registered by HMRC in this way, houses must be available to tourists for at least 210 days of the year and actually rented for at least half of them.
Meanwhile, short-term rentals, like those advertised through Air Bnb, can only legally be rented for up to 90 days a year before the owner must apply for planning permission. These are more likely to fall into the second home category.
More than 8,000 entire homes in the capital have been “recently and frequently” booked through Air Bnb alone, according to data site Inside. airbnb.
‘Legislation has failed’
“It’s so lucrative in central London, there’s a huge short-term rental market,” Wilson Craw said. “It is an aspect that worries, since the houses rented to tourists are lost before the offer available to the local population.”
He called for more regulation of second home use: “It has been very difficult for municipalities to enforce planning rules,” he said. “We need a licensing scheme that stops the inflation of property values and involves a regular fee that helps finance the application.”
Sadiq Khan echoed this call. A spokesperson for the mayor said: “London boroughs are losing tens of thousands of homes each year to short-term rentals, worsening London’s severe housing shortage. Legislation attempting to restrict homeowners to a 90-night limit on short-term rentals in London has failed due to lack of enforcement.
“The mayor is concerned that the government’s proposed planning reforms will not effectively protect homes from being used as short-term rentals and believes that mandatory registration is an important step forward.
“To safeguard the supply of permanent housing, the mayor is proposing a licensing scheme that allows local government to control the total number of houses used as short-term rentals.”
“Broken system”
Southwark Council leader Kieron Williams said efforts to crack down on vacant houses in the borough were being “frustrated by a broken national system”.
“Current law is not strong enough to prevent people from using their ‘second home’ as a short-term rental or Air Bnb,” he said. “This shady game has real life consequences with one in 23 children in London homeless.
“We have already clamped down on this on our 37,000 Southwark council homes, but the government must untie our hands so we can go further and ensure the homes are used for local families, not high society.
“What we need is a national registry where short-term leases are declared with greater powers so that we collect more municipal taxes on second homes. If the government takes upgrading as seriously as it says, there can be no further delays with its Regeneration and Upgrading Bill, which would allow councils to apply a council tax premium of up to 100% on second homes. ”
A government spokesperson said: “We are investing £11.5bn to build the quality, affordable housing this country needs. This includes £4 billion to the Greater London Authority directly to unlock more affordable housing in London.
“We are aware of concerns about short-term rentals, and are currently considering responses to a consultation on measures that would give councils more control over the number of new short-term rentals and help them meet local housing needs.
“The Leveling and Regeneration Bill will allow city councils to apply a municipal tax premium of up to an additional 100 percent on second homes. The premium will provide local leaders with additional flexibility to help address the impacts of second homes and improve the sustainability of local services where appropriate.”
An Air Bnb spokesperson added: “The typical listing in London rents for just 43 nights, far less than the 90-night limit, and four in 10 say the extra income helps them pay for their homes and the increased costs living costs.
2Airbnb takes housing issues very seriously, which is why we’ve had restrictions on short-term rentals for over five years. We welcome the regulation and put forward proposals for a UK host registry in 2021, which are already subject to government consultation.”
https://www.standard.co.uk/homesandproperty/property-news/holiday-lets-second-homes-action-demanded-b1086604.html
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