There are many rules and regulations affecting the availability of serviced accommodation in London. In this article, Arte Stays will explain some of the main factors.
Online booking platforms have had a major impact on the short-term property rental market, and the rise in bookings has led to a shortage in accommodation, fuelling an increase in prices.
Availability of serviced accommodation in London is in high demand during the summer and when major annual events take place, for example:
The London Marathon
Wimbledon
Trooping of the Colour
The Lord Mayor’s Show
Notting Hill Carnival
Chelsea Flower Show
The Proms
London Fashion Week
New Year’s Eve Celebrations
Legislation and the availability of serviced accommodation in London
So, what are the rules and regulations around short-term property rentals? The issue is complex because regulations have to balance the requirements of property owners, their tenants and the wider community, as well as legal compliance and health and safety considerations.
Planning & Tax implications
In the UK, there are different ‘classes’ of property determined by use and categorised by Town and Country Planning. These regulations affect whether planning permission is required for ‘change of use’ from one category to another.
Short-term serviced accommodation is typically in the same category as hotels (C1), and subject to business rates. Properties providing extended stays could be designated as a dwelling (C3) and are subject to council tax.
There was a shakeup in 2015 of London planning regulations in 2015, when residents were allowed to rent out their property for up to 90 nights per year without planning permission, providing one of the owners paid council tax.
However, homeowners providing stays beyond the 90-day period could be required to apply for change of use, which can be complicated, time-consuming and costly.
Health and Safety
The two main areas of Health and Safety regulations affecting short-term serviced accommodation are:
Fire safety – regular fire risk assessments; implementing fire safety measures
Building regulations – adhering to standards for design, construction, energy efficiency and accessibility.
VAT
Short-term property rentals may be subject to VAT.
Local Authority Regulations
Local Authority regulations vary by locality, with some imposing specific licensing requirements for serviced accommodation. There could be additional requirements such as regular inspections and local housing standard compliance.
Certain areas in London may be designated under a selective licensing scheme, where landlords have to obtain a license to let a property. This impacts the availability of serviced accommodation in London, especially in areas with high demand.
Legislation and the availability of serviced accommodation in London
In addition to legislation and regulations, there is a worry for local London authorities that the constant turn-over in more lucrative short-term guests, is contributing to a breakdown of local communities with fewer properties available for extended stays, diluting the character and lifestyle of local areas.
New rules for the regulation of short-term rental accommodation in London to tackle concerning issues such as housing shortages, escalating rents and disruption local communities, are still being discussed but there is speculation that they will include:
Planning permission for new short-term rentals
Tourist accommodation rental registration/licensing scheme
New restrictions imposing additional compliance requirements may may result in a more professional market for short-term rental accommodation. However, it will also make it more difficult for individuals to rent out properties, reducing the availability of serviced accommodation in London and negatively impacting the diverse selection of properties on the market.
So, legislation and the availability of serviced accommodation in London is a complicated picture and may become even more so, should some of the predicted changes happen within the near future.
The Arte Stays team is well-informed about current and future shake-ups within the serviced accommodation and short-term rentals sectors, so we can adapt our business as and when necessary, avoiding any disruption to our clients’ plans.
In the meantime, if you are visiting London for work or a holiday, why not talk to our experienced and friendly team about our serviced accommodation properties? With a growing portfolio of serviced accommodation in east London offering easy accessibility to the heart of the city and all with the comforts of home, we are sure you will find the perfect property for your visit!
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