Deregulation of the short-term let of London properties

The recently enacted Deregulation Act 2015 provides that, from 26 May onwards, homeowners in London will not need to obtain planning permission to rent out their house or flat on a short-term basis.

Under current legislation, the let of a permanent residence in London for less than ninety consecutive nights constitutes a material change of use requiring planning permission. This restriction has been criticised as arbitrary and outdated, as it applies only in London, has reportedly been inconsistently enforced across the various London boroughs and does not square with the reality of widespread use of websites such as Airbnb, which allows any homeowner to arrange the short-term let of their property.

The Deregulation Act 2015, which received Royal Assent in March, introduces a caveat to the restriction. From 26 May, planning permission will no longer be required for the let of a residential property in London for less than ninety consecutive nights if:

(a) the total number of nights that the property is let as accommodation on a short-term basis in each calendar year does not exceed ninety; and
(b) the person providing the short-term let (or at least one of the persons where more than one person is providing it) is liable to pay council tax in respect of the property. This is intended to prevent business premises from benefitting from the flexibility to change use.

The Act also gives the Secretary of State and local authorities power to direct that the relaxation does not apply to particular residential premises or particular areas. The provision for these powers and the limit in (a) above seeks to address concerns that allowing short-term lets without planning permission could lead to the loss of much needed permanent housing in London. However, it may be difficult for local authorities to assess whether the annual ninety-day limit has been exceeded, particularly if Londoners can increasingly make informal arrangements online to let their property on a short-term basis.

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