"From making planning permission compulsory for all short term lets in certain areas to introducing licensing schemes, the changes being introduced to the holiday letting sector vary across the UK and Ireland"
In recent years, the UK has enjoyed a staycation boom. First Brits rediscovered their love of destinations on their doorstep during the pandemic, and now millions of holidaymakers are opting for staycations to stick within a budget amid the cost-of-living crisis.
So perhaps unsurprisingly, many second home owners are getting in touch to weigh up the world of holiday letting. But with talk of further rules and regulations for holiday lets, some are understandably going into it with caution – and asking all the right questions about what this means for the sector.
From making planning permission compulsory for all short term lets in certain areas to introducing licensing schemes, the changes being introduced to the holiday letting sector vary across the UK and Ireland, but all the British Isles have the same eventual goal – to further regulate a sector which has progressed over the last decade or so.
At one end of the spectrum is the Scottish licensing scheme - where the wait for a licence is up to 12 months and there are 32 variations, one for each local authority. The Welsh Government has also introduced changes, so far mainly on tax, while England has consulted on a new registration scheme and planning class, proposing planning permission for all new lets in specific areas.
However, questions and concerns have been raised from the sector as to whether some of these changes are the right way forward. Currently, there is a lack of robust data which exists on the short-term letting market and the different types of let, and as a result, evidence is lacking to help inform the new policies.
The industry supports local jobs and pours in millions of pounds of guest spend annually, so there needs to be a balance between managing local concerns without introducing measures which risk undermining local economies. Clearly, it’s vital that the market operates responsibly and doesn’t negatively impact communities, but it is also important that the positive impact of the sector isn’t at risk.
At Sykes, we’re in support of the creation of a national register to provide all Governments with more concrete figures about the size and impact of the sector. From this, they can then make well-informed decisions on whether there is a need to further regulate the sector while still promoting its growth and success.
A national register would make it clear to owners what their responsibilities are and, in confirming their compliance, would give holidaymakers greater comfort by knowing they’re letting from responsible owners. We understand that England, Wales and Ireland are all likely to introduce a registration scheme over the next year or so.
We continue to engage with Government to contribute our insight and experience and showcase the enormous value our sector generates, while also supporting our owners to guide them through any changes. Sudden changes and uncertainty has unsurprisingly prompted confusion, so we’re here to ensure they’re aware of all they need to know about current regulations as well as those could still be to come down the line.
To help provide clarity for any current or prospective owners of holiday lets, we’ve summarised some of the key points below.
Across the UK
When letting out a property as a short term let, there are several health and safety regulations you need to consider – including checking electrics and gas, completing a fire risk assessment, meeting child safety measures, and following guidelines for any swimming pools or hot tubs at your property.
If you work with a holiday letting agency like Sykes, we provide an easy to use Property Safety Guidance booklet and template assessments and can help you stay on top of documents and remind you of any that are due to expire.
We also let you know of new regulations likely to be introduced and help you prepare for them – such as the creation of a national register, changing of tax rules or changing rules around planning permission.
England
If a holiday let is in England, to qualify for business rates rather than council tax, it needs to be let for 70 days, and have been available for 140 days, in the previous 12 months. If it does qualify for business rates, Small Business Rates Relief may apply.
For properties not on business rates, it is very likely that local authorities in England will soon (likely from April 2025) be able to introduce council tax premiums of up to double for second homes and short term lets.
If the property is in Greater London (i.e. one of the 32 London boroughs or the City of London) it can only be a short term let for fewer than 90 days a year otherwise it needs planning permission.
Scotland
The Scottish Government have introduced a licensing scheme for short term lets. Their stated aims are ensuring short-term lets are safe, facilitating local authorities in knowing and understanding what is happening in their area as well as to assist with handling any complaints effectively and balancing the needs and concerns of their communities with wider economic and tourism interests.
From the 1st July 2024, all existing short-term lets (i.e. holiday let before 1 October 2022) in Scotland will need a licence in order to operate and by the 30th September 2023, they must have applied for a licence to can continue to welcome guests while the application is considered.
If you had not run the property as a short term let before 1 October 2022 you cannot run it as a short term let until it has a licence.
For a property in Scotland to qualify for business rates rather than council tax, it needs to be let for 70 days, and have been available for 140 days in the previous 12 months. For further detail on this and regulations in Scotland see here.
In Edinburgh, from 5th September 2022, in all cases, to use any property that is not your main home as a short term let it is necessary to apply for planning permission.
Wales
If your holiday let is in Wales, it could be exempt from council tax and qualify for business rates. In order to qualify, your property will need to have been made available for short term letting for 252 days of the previous year and have been occupied by paying guests for at least 182 of those days and be available for 252 days in the next 12 months. If you fail to meet this minimum requirement, you will be charged council tax and a second home premium could be in place in the local council area.
In Gwynedd, it is likely that in all cases of changing the use of a main home into a second home or short term let, from 1 September 2024, it will be necessary to obtain planning permission.
Northern Ireland
If the property is in Northern Ireland, it will need a certificate from Tourism Northern Ireland before you are allowed to advertise for, or allow, visitors. The certificate will be valid for four years and further inspections will happen every four years.
Republic of Ireland
If the property is in the Republic of Ireland, and in a rent pressure zone it needs planning permission to be a short term let (fewer than 14 days) unless the property is your main or only home and a) you are renting up to four bedrooms of it (to a max of 4 people per room) or b) where it’s the entire home, the short term lets total fewer than 90 days each year.
You still need to notify the Residential Tenancies Board of the rental activity and there may be other reasons outside of the RPZ scheme for needing planning permission – but these would be dependent on your specific property and its immediate location.
