London boroughs have expressed concern over shortcomings in government plans for regulating the short-term and holiday lets sector, warning they could worsen the capital’s housing crisis.
In a letter to housing secretary Michael Gove, the cross-party group London Councils highlights the government’s proposal to create a new planning ‘use class’ for properties already used as short-term lets [1].
Boroughs fear that automatically transferring short-term lets into this new planning category under permitted development rights will mean the overnight loss of thousands of homes from London’s permanent housing stock. London Councils estimates there are at least 43,000 short-term lets in the capital – equivalent to one in every 85 London homes [2] – and believes a significant portion of these would qualify for the new planning category.
London Councils welcomes other aspects of the government’s action on short-term lets, which will introduce much-needed new regulation and oversight of the sector [3]. These include a mandatory national register of properties and continued planning permission requirements for future short-term lets.
However, London Councils argues that automatically reclassifying existing short-term lets into a new planning category – the ‘C5’ use class – without requiring planning permission undermines efforts to preserve homes for residents amid worsening housing pressures and homelessness rates [4].
The proliferation of short-term lets means less housing for permanent residents and higher prices in London’s private rental sector, which has undergone significant turbulence in recent years.
Research published last year by London Councils found a 41% reduction in the number of London properties available for private rent since the Covid-19 pandemic [5], and Office for National Statistics data suggests London private rents increased 7% in the year to 2024 – the highest jump on record [6].
Data collated by London Councils in September 2022 found at least 11% of STLs in London appeared to exceed the 90-day limit on how often a property can be rented out as a STL before planning permission is required.
Given the difficulties securing accurate, up-to-date data on STLs in the absence of a national register, the actual figure is likely to be significantly higher. London Councils also expects the situation has worsened considerably since 2022. The problem is especially acute in central London boroughs where a large proportion – if not a majority – of STLs are believed to break the 90-day rule.
Boroughs also report that short-term lets are sometimes associated with spikes in crime and anti-social behaviour, which is another reason why stronger regulation is required.
London Councils is pushing for strict planning application rules to be maintained on all short-term lets and for local authorities to receive more resources for enforcement.
Cllr Darren Rodwell, London Councils’ Executive Member for Regeneration, Housing & Planning, said:
“For too many years the short-term lets market has been growing out of control.
“With housing and homelessness pressures in the capital worse than ever, boroughs are extremely concerned about losing permanent housing stock. The priority has to be ensuring homes are available for long-term residents.
“We welcome the government’s move to improve regulation of the sector, but the blanket reclassification of existing short-term lets into a new use class could strip the capital of thousands of homes.
“Boroughs are keen to work with ministers on developing these proposals further and ensuring London is better placed to tackle this challenge.”
