The Generation Rent campaign has launched a petition on its website to give councils power to license holiday lets.
The campaign claims that “landlords are taking homes and turning them into hotels” and says that since the emergence of Airbnb and similar platforms, the number of properties being let out on a short term basis has “exploded.”
The trend is concentrated in a small number of locations - Generation Rent suggests that 80 per cent of the recent growth in holiday homes has happened in just 25 local council areas.
The government is proposing to introduce a registration scheme for holiday lets and requiring them to get planning permission but the activists say this doesn’t go far enough.
It says: “Instead, the government should give English councils powers to require holiday lets to join a licensing scheme, and put limits on their number in areas that have particularly bad housing affordability problems.”
A similar proposal has already been implemented in Scotland.
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They know that many landlords are not going to hand their properties over on an indefinite basis to tenants with the prospect of perhaps never getting them back, and therefore they are trying to outlaw alternative letting models. It seems to me that landlords have three alternatives:
Firstly, to do as Generation Rent, Shelter etc want and accept sitting tenants and the loss of control of their properties. I have ruled that option out myself.
Secondly, to get their properties empty as soon as possible and sell them. The problem is that the best time to sell has probably past. Of course, there probably will be capital gains tax to pay but that is unavoidable and with a lower sale price won't be as much.
Thirdly, to find a new letting model which is not covered by the Renters Reform legislation. This is not easy, but probably not impossible.
I think the biggest problems we face are our existing tenants. Many of us do not want to have to ask them to leave, but perhaps the Government will recognise the stupidity of what they are doing, although that is probably unlikely.
Landlords who switched from BTL to holiday lets are unlikely to switch back if they have to be licenced, they will just sell up and another industry is destroyed. Brilliant.
I heard a very young spokesman called Conor complain about the more favourable tax regime on short term rentals and that 29 homes per day move to short term rentals.
His solutions included making the tax regime on short term rentals less favourable and banning the move to short term rentals.
It didn't dawn on him that making the tax regime on long term rentals more favourable might work better and the RRB wasn't even considered as a reason for landlords bailing out.
In a free market economy incentives work far better than compulsory changes.
Great point Robert!
Also there is something legally questionable about using compulsion to make landlords accept a government created contract with which they are not in agreement.
A case of the government listening to fiscally illiterate children
It was inevitable that going after short term lets will be next on the agenda.
Like car owners, we are looked on as 'cash cows' and we already have the restrictive rental controls here in Wales.
A new Labour Government will be looking at ways to tax landlords out of the market and give tenants even further rights over our properties.
Selling is an option, but apparently, a report out today states that house prices are dropping to a level not seen since 2009.
Capital Gains Tax allowance dropping to a pittance after next April, creates the perfect storm for anyone in the property business.
I have had to put a property back out to rent, since I have had no offers, despite dropping the price by £30,000.
I think that there may be a strong case for becoming a rogue landlord?
Why should landlords be placed in that position! The people forcing landlords to consider that are the real rogues.
I agree John there is a strong case to become a rouge landlord why not ?
You shouldn't have to consider that Andrew. It is not fair to you.
It would cause you problems because your tenants will be fully aware of their new rights.
I think we need to be whiter than white i.e. to operate absolutely within the law. That means finding out precisely what the law is on alternative business models like serviced flats and not making any mistakes at all. Use exactly the right contract, and provide everything required etc.
Don't give councils, tenants etc. the upper hand.
Whiter than white Ellie I've found that when I'm whiter than white Ellie I tend to get walked over, some times it pays to go against the law
You shouldn't need to Andrew, you have been a brilliant businessman to build up such a large portfolio of properties in Norfolk. Perhaps just charge more and change over to "Andrew's Norfolk serviced flats" or something like that. Employ a cleaner and provide, perhaps, food deliveries etc. Apply for an award for providing the best serviced flats in England.
The government incentivised people to move into the holiday let market without thinking through the consequences.
Some properties simply don't make good holiday lets. Especially flats in residential buildings where people actually live.
Now the government have created this mess they need to do something to rectify at least some of it.
Obviously the most practical solution would be to treat all rental properties the same in terms of tax, business rates, licensing, etc so there isn't a massive advantage or disadvantage to any particular form of letting. Just let market forces sort things out.
I have a listed barn which I'm proposing to let out as holiday accommodation.
The problem I will face is that if all properties were to be treated the same, I would no doubt fall foul of the EPC regulations.
It’s less legislation that’s needed in the housing market not more. Bad policy decisions just lead to unintended consequences leading to more bad policy to correct it and it just goes on and on. I’d never have considered Short Let’s if it wasn’t for section 24 and removal of section 21. Will I go back to BTL if they license short let’s? Not a chance!!
Unintended Consequence - exactly! Govt never seems to think through to the end & see what is obvious to us in the market! Tenants groups are just as bad, but at least they have the excuse of not being in charge of policy making!
Exactly Tricia. That’s modern politics. Social media plays its part. Campaign groups make uneducated statements and Governments react quickly to win votes without bothering to check in to the detail and even bother to consult those at the coalface who hold the facts. The tide has well and truly turned on BTL but just like an oil tanker it will take a long time to correct its course causing suffering and chaos for everyone!
Dominic. Who's going to re-enter the market once they've bailed out? If you can't make it stack up with houses bought 10/15/20 years ago, you haven't got a chance with house prices as they are at the moment even with a correction. Portugal is full of ex landlords who are enjoying their enforced retirement - wild horses wouldn't bring them back to the sector. New money? Nope ...
So they'll have to double down on incentives to get anyone interested. Can't see it happening in the current political climate.
Exactly. I always look at my returns based on the cash left in property after any capital gains tax as it stands today not what I bought them for. and as you say the numbers simply don’t work, my money is far better off in tax free ISA’s or even simple savings accounts. Luckily I have quite a few properties locked into low rates for several years having foreseen the chaos. But as mortgages come up for renewal I switch to Short let’s if they work or simply sell.
I have a Georgian four storey townhouse which is about a five minute walk to the university, starting next year all the tenants are out and airbnb it is. The rental income after speaking to one of the other guys in the same row is more than double the rents, he has someone managing and servicing the apartments and is absolutely over the moon. No drama from tenants or phone calls at stupid o'clock and most of all he gets paid every single time.....
Well done Gen Rent, Shelter and Ginger Groups who smell of wee.! You created this mess
Jo. Didn’t have time today to read the Article’s or respond because of replacing a Shower cubical in an occupied house.
The idea of treating everyone the same or fairly for tax purposes or otherwise is a non starter. That’s why Section 24 was brought-in to make sure it wouldn’t be fair.
It’s not as if we didn’t know it was coming as it was phased-in over 4 years like 25% a year so as to sneak up on you, so first year people didn’t make too much of a song & dance about it, its a different story now its fully hit the fan.
What can we expect when Politicians making rules to suit themselves no wonder the Chancellor’s think 45.% income tax is ok he won’t be paying it.
They said they were clamping down on buy 2 let to have more homes available for home buyers. Guess what a certain Cabinet Member has £3.5m loans on buy to let for Houses in Multiple occupation in a mare of a Company in partnership with the wife who is Japanese although she’s not Japanese.
They are supposed to declare their interest to Parliament but that didn’t happen, that’ll be grand it only conflict of interest, also Companies House a sure anyone could forget that.
Then buys Seven Flats in another City in one go, excuse me wasn’t the idea to cut down on buy 2 let’s and leave those for people who wanted to buy a home. Also as I am given to understand Section 24 don’t apply to those in a Company mare or not. Did someone say we should be treated equally my goodness don’t be daft.
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