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Short-term and Holiday-let Accommodation (Licensing) Bill

Volume 724: debated on Friday 9 December 2022

Second Reading

I beg to move, That the Bill be now read a Second time.

Housing matters. Our communities matter. There can be no greater human right than having shelter, yet in many of our communities housing is being flipped over to short-term holiday lets amid a housing crisis. Housing is snatched to make wealth for investors while housing poverty’s grip freezes families out of their homes and out of their communities. Children are being taken out of school and people are being forced to leave their jobs as they cannot find somewhere to live, all so that others can profit from those dwellings. Villages are becoming desolate and urban streets are being turned into party metropolises. There is something very wrong in what is happening, and our constituents are suffering. My Bill would fix that.

Rural, coastal and urban communities are at the centre of an extraction of wealth and housing that is leaving destitution and despair. For the Government not to license short-term holiday lets but just to register them will let landlords off the hook and deepen the housing crisis. A registration scheme will appease the industry, landlords and short-term holiday let platforms but fail to give local authorities the tools that they need to protect residents. That is why I call for support for my Bill, which would bring fair and balanced changes into legislation.

I am grateful for the support of housing campaign groups such as Generation Rent, Acorn and Action on Empty Homes, as I am for that of Members across the House in the other place. Other countries are years ahead of us, yet the obsession with deregulation has caused the Government to hesitate. It is now incumbent on MPs to ensure that we legislate.

The Government’s new plans to register short-term holiday lets will not give local authorities opportunities to create controlled zones where Airbnbs are banned or numbers limited, nor to raise penalties where breaches of locally determined criteria occur so that fines can be issued or licences removed. My Bill would legislate to achieve that. Measures have been already deployed throughout Europe and in many places across the world. With the Bill, we would simply catch up by addressing the challenge.

A registration scheme tells us simply where holiday lets are, but we already know that because they are listed on public platforms. My Bill would add controls to that and do something about it, unlike the Secretary of State’s current approach. The Government are also calling for a new use class consultation up to the summer, but that concerns me, as a new use class will lock in short-term holiday lets, making it more difficult for such properties to return to residential use. Under my Bill, when the owner changes the property will automatically return to residential use—quick and simple.

The Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020 amended the Town and Country Planning (Use Classes) Order 1987 to introduce a new use class, stating that buildings or lands that were in those particular use classes prior to transfer would be treated as automatically moving into the new use class, according to the House of Commons Library. That would mean that 330,000 short-term holiday lets would be automatically deemed for that purpose. With the stroke of a pen, the Secretary of State is taking a third of a million properties out of residential use, and then requiring a full planning process for each to return to being a residential dwelling—difficult, timely and costly. This has not been thought through.

My legislation would be far more receptive to reversing properties back to housing. In April 2016, just 76,000 properties were marketed on the Airbnb website. That has risen substantially just in the last year by another 14%, but there are many other platforms out there. Every day, 29 more properties flip from residential use to short-term holiday lets. So much time has been lost, which is why we cannot delay.

My hon. Friend is making an excellent speech. This is clearly a huge issue across the country, including in my constituency in Reading. Does she also believe that more action needs to be taken on the wider range of temporary lettings that can take properties out of use by families, such as some types of student lets and some other temporary lettings?

I thank my hon. Friend for his intervention. So many things need to be done on housing, and I know that a Labour Government will put it foremost in their agenda, to ensure that everyone has a home to live in. In York, we have over 2,000 short-term holiday lets. The Government consulted over the summer about a registration scheme, but that horse has bolted. The market is out of control. It needs regulating, and my legislation would achieve that. With a licence, people do not get just a register but safety certificates, ensuring that standards are in place and complied with. If not, the licence can be revoked. Those are the challenges that we want to be addressed.

We have clearly seen a massive growth in this industry. What started off in San Francisco as an air mattress on a floor is now a £57 billion industry worldwide. That is why we have to get a grip on it. It is not just about a spare bed in the shared economy; whole swathes of streets are now pepper-potted with residential accommodation turning into holiday lets. In my constituency, we have seen a particularly sharp rise. It seems to be an issue for holiday destinations.

I know only too well some of the issues that the city of York has faced over the years, particularly having introduced its own specific rules with regard to houses in multiple occupation in recent years. I wonder whether the hon. Lady has engaged with my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken), who has also raised this issue in the House?

I have indeed. Many MPs across the House share an ambition to control this market. At the heart of the issue is the fact that we are losing housing that is desperately needed by our constituents. Also, villages are being hollowed out, which is impacting communities. In places such as York, as these properties spread along family streets, families are being hemmed in by party homes. The trolley comes up the road on a Friday night, and dread grips the community, which knows what lies ahead of it, starting with the music turning up and then sleepless nights, and profane language coming over the garden wall until quiet comes again on Sunday evening. People are desperate for measures to be introduced to control that environment. This impacts greatly on the property market. Demand outstrips supply, and costs in the private rented sector and in owned housing are extortionately high. That is why we need to ensure that good regulation is in place.

Local authorities are also missing out. They are not getting council tax from these properties as they are flipping over to become small businesses, enjoying small business rates exemption. Local authorities are losing millions of pounds, but local authority services are still required. Labour in Wales introduced a doubling of council tax and that is now rising to 300%, making sure it benefits from this situation in order to pay for the services that are often required.

I have mentioned the impact on the local community, but the economy is also impacted as we struggle to recruit, whether, ironically, in the hospitality sector, the NHS, or the perma-crisis that is causing a real challenge in social care. Bed and breakfasts and guest houses are struggling to compete with these deregulated forms of accommodation, too. That is why it is so important that we introduce a licence scheme, which will make such a difference to all our communities.

There is always a darker side with unregulated markets. The lack of accountability harbours an even more worrying trend. In York, we have seen pop-up brothels in short-term holiday lets, businesses that come and are then gone after the weekend. This summer I had a case of a property being used for drug dealing; the landlord knew and did nothing. County lines gangs have learned the benefits of this unregulated industry, as have those exploiting others through modern slavery. I dread to think what is happening around child sexual exploitation. The law is lax and that is why we must legislate.

I therefore say to the Minister that we need to move urgently to get a licensing scheme in place for short-term holiday lets. Let’s licence these lets.

I pay tribute to my hon. Friend the Member for York Central (Rachael Maskell) for her hard work on this issue and congratulate her on introducing the Bill, which Labour strongly supports.

Short-term letting, facilitated by businesses such as Airbnb, could be positive for our tourism sector and local economies, but short-term letting is only a good thing if it is sustainable and strengthens communities, rather than weakening them, and currently the unchecked prevalence of short-term and holiday lets is causing harm. First, there is a stream of temporary visitors who are not invested in the place in which they are staying; they may not follow rules on noise levels or health and safety. But even more fundamental, as my hon. Friend described, is the problem of what happens to a community when too many residential properties become short-term or holiday lets. Instead of the investment, employment opportunities and strong tourism industries that communities need to thrive, this kind of letting is causing a housing and public services crisis across coastal and rural parts of the UK and her area of Yorkshire.

Areas such as Shropshire, Northumbria and Cornwall are seeing house prices soar and availability drop as wealthy outsiders buy up second homes to let out. That squeezes the affordability and availability of homes, particularly for local first-time buyers and private renters. It also results in houses left empty for large chunks of the year, reducing permanent populations. That can impact the local community disastrously: schools become unsustainable and close as local families are forced out, transport services are cut, and health and other services disappear as demand drops.

This Bill would help communities to regain control and is in line with the findings from Labour’s commission on the UK’s future. As we have heard, the Bill proposes to give local authorities the powers to implement licensing schemes for the conversion of domestic properties into short-term and holiday-let accommodation. It would also, importantly, give them the right to exercise appropriate powers over those schemes: issuing fines or removing licences where key conditions are not being met; varying local tax rates in relation to such properties; limiting the number of days a year that short-term holiday lets can be rented; and banning their licensing in certain areas.

If this Bill becomes law, places will be able to reap the rewards of thriving tourism, without the risk of communities becoming ghost towns when the holiday season ends, and locals will no longer be priced out of their own neighbourhoods. Getting this right quickly is essential, as my hon. Friend has been saying. Our tourism sector is doing all it can to attract visitors, but is doing so while grappling with the slow recovery from covid, a cost of living crisis and rising energy bills and inflation. I urge Government Members not to talk out this Bill today, but to join Labour in supporting it.

I thank the hon. Member for York Central (Rachael Maskell) for bringing this important debate to the House and for her diligence in continuing to highlight this important matter. I know that we had a lot of exchanges while I was the Minister for Housing, and I am sorry that we never got around to doing the roundtable I promised to do with her in her constituency.

The short-term and holiday letting sector is a matter of considerable interest across all parties, and many hon. Friends have raised it with me, too. I am sure it will continue to be a big issue. The voices that we have heard are key to keeping this debate going and I offer my thanks to the hon. Lady.

The short-term and holiday letting of residential accommodation to paying guests is not a new phenomenon in this country. We have long been able to boast about the quality and range of England’s guest accommodation offer. The quintessential English bed and breakfast, holiday cottage or homestay have been important parts of our accommodation offer for many years. They have long catered for the needs of tourists, those travelling for work or people in need of temporary accommodation. However, it is clear that, over the past 10 to 15 years, there has been a rapid and significant growth in the short-term and holiday letting market, which has changed the shape and size of England’s guest accommodation sector.

At the heart of that change has been the emergence of the sharing economy. Online platforms have played a key role in making it easier to connect homeowners who want to rent out their accommodation with people who are looking for a place to stay for a short period. I want to be clear that the rise of these online platforms and the subsequent expansion of the short-term and holiday let market has been beneficial for hosts, consumers and the wider visitor economy. I am sure that many Members attending the debate today will have made use of them themselves, as will many of their constituents. At the same time, however, we must recognise that this expansion has created challenges and concerns in some of our communities.

Obviously we are still facing a housing crisis in this country and, while I completely agree that short-term lets go some way to helping our tourism economy recover from the after-effects of covid-19, does the Minister agree that we need to strike the right balance between the usage of private rented accommodation for short-term lets and ensuring that there are enough good-quality affordable homes available for people who would want to buy or rent them?

I absolutely agree with my hon. Friend that we need to have a measured and effective approach, and I will come on to that shortly.

On the issue of the private rented sector, the reason why so many are flipping is the inequality within the tax system, where landlords can no longer gain tax benefit as a result of the improvements they make to their property. We clearly now have an inequitable situation. Does not the Minister agree that that is why it is so important to bring forward tighter regulation to license these properties?

I do. There are many complex issues around this important point, and the hon. Lady highlights one of them. During my time as the Minister for Housing, I was speaking to colleagues across Government about various solutions we could come up with, and I hope to elaborate on that a bit more in a moment.

Our ambition has been and will continue to be to ensure that we sustainably reap the benefits of short-term lets and holiday lets, while protecting the interests of holidaymakers and local communities. The Government have recently taken a series of steps that we are confident will help us to achieve our ambition for the sector. The Government have recognised for some time now that there are significant concerns that need to be investigated further. That is why, in last year’s tourism recovery plan, we set out our intention to consider a tourist accommodation registration scheme in England. That forms part of the Government’s ambition to create a more innovative, resilient and data-driven tourism industry.

There is, unfortunately, a lack of information and data on the short-term lets market in England. That is why our first step was to carry out a call for evidence, which ran from 29 June to 21 September this year. We had two key aims for that call of evidence. Our first aim was to hear from a range of stakeholders, to help us to develop a fuller understanding of the current market. Our second aim was to use the data and information we gathered to develop policy options. To do that, we asked questions about the changes and growth that have been evident in the market, the benefits and the challenges of short-term lets and the impact of potential policy responses. In total, we received 4,000 responses from all manner of individuals and organisations located throughout the country. Those included hosts operating in the market, guest accommodation businesses, online platforms, enforcement agencies such as local authorities and representative bodies and groups.

That brings me on to the next steps we are taking to improve the short-term lets sector. The call for evidence highlighted that there is a case to introduce light-touch regulation in this currently unregulated sector. The Government are therefore introducing a registration scheme for short-term lets through an amendment to the Levelling-up and Regeneration Bill tabled on Wednesday 7 December. There are a number of benefits to introducing a registration scheme. It will deliver much-needed data and evidence on short-term letting activity across England, providing transparency on the numbers and locations of short-term lets for local authorities, central Government and enforcement agencies. It will improve consistency and coherence in the application of statutory health and safety regulations. It will boost England’s reputation as a destination for visitors, and it will help to attract more international visitors by giving a visible assurance that we have a high-quality and safe guest accommodation offer for all. Finally, it will support local authorities where a high number of short-term lets are deemed to be impacting their local housing market.

Local authorities have highlighted the challenge of accurately assessing the scale of short-term lets in their areas, often having to rely on data from third party providers. As there are some questions over the reliability of that data, a registration scheme would provide local authorities with better information on short-term letting in their area. A consultation on the design of the scheme will be carried out next year before the summer recess. For those reasons, the registration scheme should be seen as a significant step in our policy approach to the short-term lets sector.

Does the Minister realise that over that period, another 6,525 properties—29 a day—will flip over to become short-term holiday lets? Surely we need to get on with licensing now.

I hope that I have indicated how seriously the Government take this issue, but it is right that we do this properly and make sure we get as much data as possible, so that we really know the position we are facing.

The registration scheme is an altogether different step from the licensing scheme put forward in the Bill. As the Government are already progressing with the registration scheme that I have outlined, I am afraid we cannot support the Bill. None the less, the Government recognise that a registration scheme alone will not address all the challenges that have been highlighted today, particularly in the case of housing. The Government are aware of calls for changes to the planning system. Currently, planning permission is not normally required when an existing house starts to be used as a short-term let. We therefore propose to consult next year on whether planning permission will more often be required when a house seeks to start to be used as a short-term let and for new short-term lets, especially in tourist hotspots.

Today’s debate has also touched upon concerns that landlords may be prioritising short-term letting activity instead of long-term tenancy agreements. This has limited the ability of local people to secure affordable private rented sector properties. The Government are also committed to giving private renters a better deal, with greater security of tenure and safer, higher-quality homes. On 16 June, we published our White Paper, “A Fairer Private Rented Sector” which sets out our plan to fundamentally reform the sector and level up housing quality in this country. Since then, we have also committed to banning section 21 no fault evictions to protect tenants.

The debate stood adjourned (Standing Order No. 11(2)).

Ordered, That the debate be resumed on 24 March.