The government has released a call for evidence to evaluate the impact of short-term lets on the housing market with the view to implement more effective regulations.
Housing supply challenges are leading to mass shifts in quality of living - with young adults unable to leave their parent’s homes, household overcrowding, unstable living circumstances and even an increase in homelessness.
How should this crisis be addressed? The most powerful way to address this crisis is to build more affordable homes across the country. The UK government has stated targets for this, but are falling behind on their plans to build new properties.
Another factor in this crisis is unused homes, with an increasing number of properties being used primarily as a holiday home or other short-term let. Short-term lets are often criticised for having a big impact on the private rental sector, contributing to a significant lack of suitable housing for locals.
How big is the problem? Research from the BBC indicated that the total number of holiday lets across the country has risen by 40% since 2018. Propertymark estimated in 2020 that 46,000 properties have already been made unavailable for local people looking for a home due to private landlords changing from long-term to short lets and one in 10 landlords would consider switching to short lets, under the current regulatory framework.
The correlation between increasing short-term lets and housing supply problems in the UK is unignorable. There is now pressure on the Government to take action to apply stronger controls to short-term lets to ensure a better balance between housing supply and the potential economic benefits from holiday makers.
Government plans for 2023. The UK Government has released a call for evidence to develop a registration scheme in England for tourist accommodation with the aim of collecting data on the market to better understand the impact of short-term lets.
The call for evidence will look to address potential solutions for the key challenges caused by increasing short-term lets - particularly localised to areas where these issues are intensified by larger numbers of holiday makers.
It will consider the growth of the short-term letting market, benefits of short-term lets and the potential impact of new policy suggestions. Additional consideration should be given to localised effects of the policies to account for the county variation in holiday let oversaturation.
It will be difficult for the UK government to balance the need to provide long-term homes with the economic benefits of holiday rentals, particularly considering the ever-growing need to boost the UK economy and move out of the cost of living crisis.
We hope that call to evidence will pave the way for balanced and data-driven initiatives which can benefit both the private rental sector and short-term letting agents.
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