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Short and Holiday-Let Accommodation (Registration) Bill

Volume 711: debated on Wednesday 23 March 2022

Motion for leave to bring in a Bill (Standing Order No. 23)

I beg to move,

That leave be given to bring in a Bill to establish a national register of short and holiday-let accommodation; to give local authorities powers to require information in association with that register; and for connected purposes.

Over the last 10 years or so, the opportunities offered by the digital economy have transformed the world, much of it for the good. The sharing economy that digitalisation has opened up—from ride sharing to home sharing—has brought many benefits, but deregulation often has its downsides, and the short let and sharing accommodation sector is no exception. From the heart of London, where Government deregulation after 2015 has contributed to an explosion in short lets, to coastal resorts and towns and cities the length and breadth of the country, short or holiday lets—often referred to generically by the name of the largest such company, Airbnb, but actually spreading far beyond it—are an issue that now requires effective management.

This is not, of course, about banning owners from renting out rooms or even their whole properties in line with how the sharing economy was originally conceived. Owners can earn valuable money, put empty space to good use and contribute to their local tourist economies, and all of this is welcome. To give praise where it is due, Airbnb and many short let hosts made a very significant contrition during covid and are now engaging over the Ukrainian refugee crisis, and I absolutely give them credit for doing that. But the sharing economy is not really where we are now, because increasingly we are dealing with a fast-growing industry that is highly commercialised and operating at scale. For example, a report in 2020 found that just 12.5% of Airbnb’s revenue came from the kind of home sharing let that was its original concept. In the face of that, we must take action to manage the sector constructively but effectively.

Three key themes now lead to the pressing need for action, including registration of the sector so that we know who is letting property, where they are letting it, and for how long. The first concerns the impact on housing supply—that is, places for people to actually live. It is clear that the short let tourist accommodation sector is now dominated by whole property lettings in many areas, including owners with multi-property listings. That suggests a significant shift into that market by individuals and businesses who would otherwise be in the residential lettings market, or making property available for sale.

Before the covid-19 pandemic, Westminster—my borough—had the highest proportion of entire homes listed on online short lettings sites, currently standing at 13,039. In his research, academic Tom Simcock of Edge Hill University found there had been a 423% increase in the number of multi-host entire apartment lettings between 2015 and 2019. That equates to just over 4,400 properties in London alone being let by hosts with multiple listings. Nearly four of out every five lettings in my borough were for whole homes, with a similar figure for Kensington, and more than 60% in Camden and Hammersmith. Four out every 10 hosts in my borough listed multiple properties, with the numbers nearly as high in Camden and Brent.

This is, of course, a national issue, although some of the rules on planning permission requirements vary between London and the rest of the country. The House of Commons Library briefing from a few weeks ago referred to a 661% growth in short lets in Cornwall over just five years, and colleagues in towns and cities across the country, from York to Cambridge and from Plymouth to the Lake district, recognise that pattern. What it means in practice is that an ever growing share of properties in a number of locations are unavailable for anyone to live in. No one planned that, or discussed what the implications might be, but it has happened.

The second theme concerns the near impossibility of enforcing the rules that exist. The deregulation of London’s holiday let market from 2015 onwards not only made it substantially easier to let out property on that basis, but made the task of monitoring and managing breaches of the rules harder and costlier for local councils. There is ample evidence that some hosts have engaged in routine short-term letting for longer than the 90 nights a year permitted in London, despite Airbnb’s introduction of a 90-day limit on its platform. The BBC has been among those investigating the extent to which agencies and landlords have bypassed the controls introduced by Airbnb to deliberately flout the 90-night limit and engage in short-term letting activity above 90 nights without planning permission. Research carried out for the Greater London Authority estimated that more than 11,000 properties were let in breach of London’s 90-day-a-year rule, yet in 2019-20 my borough of Westminster issued only 49 enforcement notices.

Local authorities across London—and, I am sure, across other parts of the country—both Labour and Conservative, have faced significant challenges with the funding and technology needed effectively to regulate and enforce measures against short-term landlords in breach of the rules. London councils, the Mayor of London, and local authorities elsewhere, are left to pick up the pieces, spending scarce resources and frustrating residents who bring forward complaints about which local authorities are unable to take any action. Currently, more than 2,000 live short-term lets are being monitored by Westminster City Council alone for suspected breaches of the rules.

That leads to the third dimension of this issue, which is the extent to which short-term and holiday lets can contribute to nuisance, thereby requiring local agencies, from the police to local authorities, to devote time and money to responding on behalf of neighbours. Such nuisance can include, as my own council has indicated, crime and antisocial behaviour, prostitution, noisy parties, housing benefit fraud and drugs trafficking. Indeed, there is a growing consensus that there is a serious problem with criminality at the bottom end of the short let market. Excessive quantities of commercial waste are generated, which is often misclassified as domestic waste and not paid for. Another issue is regular unlicensed music events and noise. In the first six months of 2021, during lockdown, the council identified 83 short lets purely as a consequence of their being locations for unlicensed music events.

Unsurprisingly, the leader of Conservative-controlled Westminster—so this is a cross-party point—says that

“irresponsible short-term lets are making life hell for residents and causing a strain on council resources”.

My own casework confirms that. Residents in apartments and mansion blocks describe noise, nuisance and security fears as the place they used to call home now bears all the characteristics of a hotel, but with none of the safeguards.

Finally, the growth of the short-term let industry has created an uneven playing field in the hospitality sector, with traditional providers such as hotels required to bear the costs of business rates and corporation tax, and comply with regulations, not least in respect of health and safety, whereas short-term let owners do not. My own council points to one striking example: before the pandemic, Park West apartments close to Hyde Park had more rooms available for short-term letting than exist in the whole of the Ritz hotel. The Ritz hotel pays £2.27 million in business rates annually. The combined council tax bill of the Park West apartments that we know are used for short-term lettings is £92,686.

Here we are, seven years after the deregulation of the sector in London—five years after I last introduced a Bill to encourage regulation—and with a generally deregulated sector in the rest of the country, but still no action from the Government. We are promised a consultation on a registration scheme, but we need action. I stress again that I do not want a ban, because there are proven positives to short lets in respect of personal incomes and local economies, but we need a registration scheme so that everyone letting out their property in this way can be identified, and the minority with tenants with problematic behaviours can be held easily to account. As the Mayor of London has proposed, such a scheme would need to be nationwide and mandatory, to track properties being let across platforms, require proof of ownership and proper identification of the letting landlord. Those are not onerous requirements but they would make a significant difference.

Requiring all landlords to be registered in order to provide short-term lets would make recourse to justice easier for victims of crime. If the criminal landlord was not on the register, they would already be on the back foot. It would help ensure councils could monitor breaches of the rules and act swiftly to deal with noise, waste and other nuisance. We have waited too long for a response to this growing problem, and the Government need to act now.

I do not oppose the right of the hon. Member for Westminster North (Ms Buck) to introduce a Bill because I would defend that right to the utmost, but I wish to show solidarity with the people who are the targets of her Bill—those small businesses that engage in providing much needed holiday and short-term let accommodation. Conservative Members certainly do not intend to allow those businesses to be regulated in the way that she suggests.

Earlier today, my right hon. Friend the Chancellor spoke eloquently in the spring statement about the importance of deregulation and the reduction of burdens on small businesses. The hon. Lady’s proposals call for yet more regulation and interference in a whole sector of small businesses that provide short and holiday let accommodation. The deregulated sector, as she was prepared to admit, responded flexibly and imaginatively to the covid-19 crisis, and that was because it was deregulated—it was free and flexible to do what was needed in the circumstances. Under the regulation she would like, that would not have been possible. When people were deprived of the opportunity of taking holidays abroad, the supply of accommodation in constituencies such as mine would not have expanded in the way that it did to meet the demand.

Small landlords are already fearful that the Government are intent on creating a national register of landlords, going back on previous assurances given to the House by a series of Housing Ministers—most recently the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for South Derbyshire (Mrs Wheeler) when she was a Housing Minister. She and other Ministers before her said that a national register of accommodation would be an unnecessary and costly additional layer of bureaucracy that would do nothing to improve the quality or quantity of such accommodation.

The hon. Member for Westminster North referred to what has been happening in the residential lettings market. It is quite clear that because of fears that the Government are going to introduce more controls in the residential lettings market, a lot of people have moved away from residential shorthold leases. They are fearful that the Government will effectively give retrospective security of tenure to people who entered into agreements to occupy that accommodation on the basis that the landlord could recover possession under section 21.

What are the unintended consequences of what the Government are already threatening to do? They are that the people who are adversely affected by that potential regulation are themselves switching to providing alternative accommodation. Instead of having an additional supply of rented accommodation available for those who want to use it, we are now finding that much more of the supply of rented accommodation is going towards holiday and short-term lets. That is a direct consequence, in my submission, of the senseless regulation that was brought in by the Government and of the threat of further regulation.

It is a principle that bad regulation begets the need for further regulation to deal with the situation that arose because of unintended consequences and good will. The hon. Lady and I served as officers on the all-party parliamentary group for the private rented sector. There is much we share in common about the need to deal with rogue landlords and so on, but I think we disagree about the best means of achieving that. How ironic, therefore, that her proposals suggest that local authorities should be given an additional burden and responsibility, when they cannot even cope with the existing burdens and responsibilities that this House, in much legislation, has placed on them.

We already have a scandal not just in the private rented sector but in the social rented sector. Council houses owned by local authorities have been let to people who then sub-let them with impunity, thereby effectively taking them out of the social housing market. We also have a situation—it certainly extends to my constituency—where there are no council-owned properties but there are housing association-owned properties and the condition of quite a lot of those properties is a disgrace. The local authority does nothing to enforce against that. Local authorities cannot even cope with the current burden of regulation. The hon. Lady says there is an issue about enforcement. There will certainly be even more of an issue about enforcement.

In the end, the hon. Lady’s Bill will be an attack on good, responsible citizens and small businesses who are trying to help meet a need by providing the short let and holiday accommodation she describes. I am glad she praised Airbnb, because so many of our constituents benefit from going to Airbnb properties, both in this country and abroad. Those properties are now introducing more competition into this important sector. I do not wish to divide the House, as that would be a pointless exercise. We have finished all Friday business for this Session, but the hon. Lady will be able to bring in her Bill in the next Session. If she does, I look forward to opposing it vehemently.

Question put and agreed to.

Ordered,

That Ms Karen Buck, Nickie Aiken, Tim Farron, Rachael Maskell, Lucy Powell, Matthew Pennycook, Tulip Siddiq, Daniel Zeichner, Fleur Anderson, Luke Pollard and Andy Slaughter present the Bill.

Ms Karen Buck accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 6 May, and to be printed (Bill 290).

Commercial Rent (Coronavirus) Bill: Programme (No. 3)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Commercial Rent (Coronavirus) Bill for the purpose of supplementing the Order of 24 November 2021 (Commercial Rent (Coronavirus) Bill (Programme)) as varied by the Order of 12 January 2022 (Commercial Rent (Coronavirus) Bill (Programme) (No. 2)):

Consideration of Lords Amendments

(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.

Subsequent stages

(2) Any further Message from the Lords may be considered forthwith without any Question being put.

(3) The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Steve Double.)

Question agreed to.