Department for Communities and Local Government
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Measures to boost sharing economy in London

Brandon Lewis outlines government reforms aimed at ensuring London residents have the opportunity to rent their homes out on a short term basis.

Housing Minister Brandon Lewis outlined details of government reforms aimed at ensuring London residents have the opportunity to rent their homes out on a short term basis, without paying for a council permit.

Under a law dating back to the days of the Greater London Council from 1973, any Londoner who wants to rent out their home for less than 90 days must apply for planning permission, or else face a fine of up to £20,000 for each ‘offence’.

The laws are poorly and confusingly enforced across London, as was highlighted during the 2012 Olympics. Londoners now increasingly want to rent out their homes temporarily, to take advantage of internet websites allowing short-term rents. The reforms will also help boost London tourism, by increasing the availability of competitively priced accommodation, and reduce the number of houses lying empty.

Following a consultation last year, the government yesterday (9 February 2015)published details of how the law will be overhauled and scaled back, while ensuring common sense measures to protect local amenity.

Brandon Lewis said:

We live in the 21st century, and London homeowners should be able to rent out their home for a short period without having to pay for a council permit. These laws date from the long-gone era of the GLC, and need to be updated for the internet age.

We are putting in some common sense measures to protect local amenity, whilst allowing Londoners who go on holiday to make a bit of extra money by renting out their home whilst they are away.

Further information

There are currently thousands of London properties advertised on websites including Airbnb, Onefinestay and Gumtree for use as short-term accommodation. However, each is potentially in breach of these outdated laws.

Mr Lewis said London residents should be able to participate in the sharing economy, and enjoy the same freedom and flexibility as the rest of the country to temporarily let their homes – without facing disproportionate rules and regulations.

That’s why the government intends to restrict short-term letting of homes to a maximum 90 days in a calendar year, so that properties cannot be used for short-term letting on a permanent basis throughout the year.

This will increase the amount of competitively priced accommodation available for people to rent, whether for work or as tourists, and reduce the amount of underused and otherwise empty properties in the Capital.

The government will also introduce new safeguards to ensure this new flexibility is not exploited, by:

  • ensuring that, to benefit from the new flexibility, the properties must be liable for Council Tax – thereby excluding business premises

  • giving councils the power to withdraw this new flexibility if successful enforcement action is taken against a property owner flouting these rules

  • ensuring that, in exceptional circumstances, councils will be able to request that the Secretary of State agrees to small localised exemptions from the new flexibility, where there is a strong case to do so

The restrictions on short-term lets are covered by Section 25 of the Greater London Council (General Powers) Act 1973 – the government plans to amend this through the Deregulation Bill currently before Parliament.

The changes will not affect any existing clauses in tenancy contracts which prohibit subletting by tenants.

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