Londoners to legally rent their homes on short term leases

Londoners to legally rent their homes on short term leases

Londoners can now legally rent their homes on short-term leases through sites such as “Airbnb”.

For up to three months a year, they will be allowed to let out their property or spare room on a short-term basis under new rules unveiled by ministers today.

The proposed reforms will also give tourists the chance to “live like a local” in London rather than staying in hotels or B&Bs.

Currently, homeowners in the capital are banned from letting out their property for less than three months, under the Greater London Council Act 1973, unless they have planning permission.

But ministers are hoping to remove this limitation, under the Deregulation Bill, so Londoners can benefit from Government’s “sharing economy” drive.

There have been several objections to the change though from those who fear that their blocks of flats will be turned into hotels with noisy guests and increased crime and littering.

Further objections include the risk of losing family housing from the main rental market and a risk to community cohesiveness.

Ministers have therefore proposed a series of restrictions to address any concerns:

  • Homeowners would only be able to rent out their property as a short-term let for up to 90 days a year to stop such lettings being done on a commercial or permanent basis.
  • In “exceptional circumstances”, town halls will be able to ask the Secretary of State to agree to small localised exemptions from the new flexibility, where there is a strong case to do so.
  • Properties must be liable for council tax so business premises will not be covered.
  • Councils will be able to exempt properties where the owner breaches the regulations.

“London is one of the world’s top holiday destinations. Draconian rules dating back 40 years prevent the capital’s homeowners from renting their properties to tourists,” said housing minister Brandon Lewis.

“That’s why I want to change the law, and free Londoners up to rent out their homes.”

Websites such as Airbnb are currently advertising thousands of London properties and many Londoners rented out their homes during the 2012 Olympics for a matter of weeks and plan to during the Wimbledon tennis tournament.

According to Airbnb, its typical UK host earns £2,822 a year by letting their property for 33 days.

But Londoners who rent out their properties for short stays, without planning permission, could be at risk of a fine of up to £20,000.

However, the Communities Department stressed this law was being inconsistently enforced, leading to confusion and uncertainty for householders.

It also highlighted that the internet had opened up the rental market and so London had to “catch up with the 21st Century way of living.”

“Residential homes provide a different type of accommodation from the average hotel or guesthouse,” it added ahead of the Deregulation Bill being debated in the Lords this week.

“Renting a room in a person’s home or renting their home while they are away provides the opportunity to travel and live like a local.”

The relaxation of the rules is not just restricted to homeowners.

But Londoners will have to check their mortgage clauses, or tenants their leasehold or other agreements, to ensure whether they are permitted to rent out their property.

Fraud investigators are already targeting social housing tenants in Camden suspected of breaching rules by sub-letting their homes to tourists.

Will this lead to increased subletting by tenants or is it simply good business by those who have a lot of equity stored in their homes.

Read more about the London property market below;

Cupboard on London property market with insane price tag: here

Is it now cheaper to live in Barcelona and fly to work everyday than rent and commute in London?: here

50% more Londoners leaving the capital: here

Would you live above London’s prisons?: here

 

Author: Tenant Referencing

Keeping you up to date with all the most important changes, all the most interesting gossip and all the big news in the Private Rented Sector.

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