Is London headed for a short-term rental property crisis?

Despite the doom and gloom surrounding the UK economy, Brexit, etc life goes on for those in London and around the rest of the UK. As the number of tourist visiting the UK continues to grow there is renewed demand for further rental accommodation. However, the London Assembly has stepped into an argument between letting agencies and London councils regarding rental/planning permission regulations.

Short-term lets in London

Homeowners in London must apply for planning permission if their homes are used for short-term lets of more than 90 days per annum. This law has been in place for sometime although a mixture of budget reductions amongst local councils and a reluctance to enforce the regulation by letting agencies has seen it generally overlooked. However, the London Assembly has been in talks with various London letting agencies about enforcing the 90 day limit.

It is unclear whether the vast majority of this additional rental income is declared for tax purposes but if part of your property is let from more than 90 days a year then owners must apply for planning permission. Suggestions that some landlords are “turning their properties into hotels without planning permission” are well short of the mark but they do make a valid point.

Enforcing the regulations

At this moment in time it is difficult to see how any fool proof system could be created which would measure how many days a particular property has been active in the rental market. If it is simply a case of individual letting agencies “counting the days” what is there to stop “private landlords” from jumping between different letting agencies? Alternatively they could arrange their own private rental arrangements which would effectively circumnavigate the system.

The idea of council officials knocking on doors asking how long part of a property has been rented out to 3rd parties is nonsensical. Budgets are stretched, housing officials already have too much to do and what right in law would council officials have to knock on individual doors with no evidence?

Short-term pain, long-term gain

On the surface the idea of enforcing the 90 day rule does sounds a little pedantic and over the top. However, if you sit back and consider the situation on a long-term basis there are valid reasons.

If short-term rental arrangements, via private landlords, are masking the long-term need for “official” rental properties this could be a problem. This move by the authorities will potentially cause a short-term shortage of rental properties but would allow the construction industry and property investors to plan for the longer term. The simple fact is, in London and around the UK, there is not enough rental property available to satisfy demand and demand continues to grow at a much quicker rate than supply.


This move by the authorities to enforce regulations which have been in place for some time may cause short-term uncertainty but should allow a clearer long-term picture to emerge. It is difficult to ascertain from the information available whether “private landlords” renting out part of their property are declaring this income for tax purposes. If that were the case this would allow the authorities to gain a more detailed picture of the situation so we can probably assume much of this additional income, whether susceptible to tax or not, is not being declared. There are many different angles from which to look at this particular situation, all of which are shrouded in a degree of mystery.

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