Will England follow Edinburgh in cracking down on short-term rentals?

Edinburgh will introduce tough new restrictions on short term rentals, could this be a solution for English councils with similar issues? Megan Kenyon reports

From September new owners of short term rentals in the Scottish capital will have to apply for planning permission from Edinburgh City Council. Current owners will have until April 2023 to apply.

By introducing a ‘Short Term Rental Control Zone’ any property that is not someone’s primary residence will need planning permission to change the use of the entire property.

According to Edinburgh, the overwhelming majority of respondents to a consultation were in favor of including the whole city in the control area plans.

Cammy Day (Lab), the leader of Edinburgh said of the new measures: ‘For too long many homes have been lost in our city to the holiday market.

Around a third of all short-term rentals in Scotland are in Edinburgh and the city experiences high demand for accommodation in August during the Edinburgh Festival. Cllr Day said their “combined issues of safety, anti-social behavior and noise have a detrimental effect” on many townspeople.

“Additionally, we have unique housing pressures in Edinburgh, with a small but densely populated city center and a rapidly growing population,” added Cllr Day.

“This policy change will help us control the number of properties misused in this way and help us better balance the supply of housing for local people throughout the year, without preventing people from renting rooms to performers during festivals,” Cllr told the day.

Airbnb does not believe the new rules will affect most of its hosts.

An Airbnb spokesperson said: “The vast majority of hosts in Scotland are ordinary people who occasionally rent a house to supplement their income. Nearly 4 in 10 say the extra income helps them cope with the rising cost of living. We want to be a good partner for the authorities and collaborate on rules that support local families and protect local communities.

But what could Edinburgh’s decision mean for the English councils? And is there already a desire to introduce similar controls?

The situation in England

Second home ownership and short-term rental is also a big issue for local authorities in England, especially in rural areas like Cornwall, Cumbria and Norfolk. As in Edinburgh, short-term rentals drive up prices for local residents, with a ripple effect on businesses in the community.

The Upgrade and Regeneration Billwhich is currently pending in Parliament, should introduce the power for local authorities to levy a housing tax premium on accommodation which remains empty for more than 70 days per year up to 200%.

While action on this issue has received a positive response, this measure has been criticized for not going far enough. Often landlords apply to have their short-term rental recognized as a small business, thereby becoming exempt from council tax, although they still have to pay business rates.

LGC has looked at the situation in several areas where this is a problem, including Cumbria, Norfolk and Cornwall, where councils have said they want new measures that go beyond those already in the bill.

A DLUHC spokesperson said: “We are already taking action to address the negative impact second homes can have on local communities – particularly in tourist areas such as Cornwall, Cumbria and Norfolk – by removing the tax loopholes, by introducing higher rates of stamp duty. and empower municipalities to apply a tax bonus of up to 100% on second homes.

Cornwall

As one of nine areas chosen to pilot the government’s flagship county deals, Cornwall is currently exploring its options for further devolution.

According to a source familiar with the negotiations, the council is “trying to stem the loss of residential properties to second homes”.

One of the ways it could do this is to introduce a ‘planning use class’ which means people would ‘need planning permission as a change of use to a residence to a secondary residence. It would create “another hurdle” for potential owners to jump over to “dissuade them from doing this”.

However, this change would require an amendment to the primary legislation and therefore “could not be done just for Cornwall”.

The best he hopes for through an agreement is a government commitment to work with the council “to explore what this legislation will look like”.

Cumbria

Speaking to LGC, Tim Farron, MP for South Lakeland and spokesperson for the Liberal Democrats, Housing and Communities, said short-term rentals and second home ownership is a “massive problem “in his constituency.

“We cannot ignore the very, very serious impact that over-ownership has on communities,” he said. Residents have been forced out of Cumbria’s towns and villages by soaring rents and property prices caused by the high demand for property in the area.

With more and more second homes and vacation rentals across the county, permanent residents have become rare. “Slowly but surely you lose demand for the post office, the shops, the pubs, the churches, the bus routes, and they just become ghost towns,” Mr Farron said.

“A small part of that will come from second home owners who have opted to cash in on the vacation rental boom,” he told LGC.

“But the greatest number will have come from landlords thinking, ‘I can evict people through Section 21 evictions and make five times as much money on Airbnb,’ and that’s exactly what happened,” he added.

This had a ripple effect on Cumbria’s workforce and in an economy that relies heavily on hospitality and tourism it was almost disastrous.

‘There simply isn’t a working age population,’ Mr Farron said, ‘last year 63 per cent of hospitality and tourism businesses in Cumbria operated below capacity as they couldn’t find the staff.”

Mr Farron, who sits on the committee of the Leveling and Regeneration Bill, also criticized the Bill’s measures intended to tackle the problem, telling LGC that they “won’t even scratch the surface” because “empty properties aren’t really the problem.”

Stewart Young (Lab), the leader of Cumbria CC agrees that the measurements do not go far enough.

“If you buy a property in Keswick and rent it for more than 70 days a year, you can register it as a business and therefore you pay no council tax at all,” he said. declared.

“So whether the housing tax (on empty properties) is 100% or 200%, it doesn’t matter,” Cllr Young added.

Both suggest that reforming the system might be the best way to tackle this problem.

“Amend the planning act to make zero second homes another category of development,” Mr. Farron said, “if you wanted to change the way you used your first home for a second home , then you will need to apply for a building permit.”

Cllr Young said the planning authority should be allowed “to deny vacation rental permission”.

“Similarly, for example, if you’re on a residential street, you can’t just open a business because that would require a change of use, which can be denied,” he said.

Norfolk

North Norfolk DC, which has the second highest proportion of second homes in England, after the City of London, recently published a report in secondary residence in the district.

The council has one of the highest proportions in England in terms of total numbers and requires second and holiday homes to require planning permission from the council. It already charges 100% housing tax on the majority of second homes. She chose not to reduce the housing tax on second homes.

Steve Blatch, the chief executive of North Norfolk, said ‘the issues and concerns about the number of second homes and holiday homes in North Norfolk are not unique’.

“As an authority, we are open to legislation that may be introduced through the taxation and council planning systems to try to manage the situation in the future,” Mr Blatch said.

Wendy Fredericks (Con), portfolio holder for housing and benefits in North Norfolk, echoed Mr Blatch’s comments, but pointed to the lack of affordable housing in England as a significant contributing factor to the problem.

“The main problem is the continued lack of central government investment to provide affordable housing,” said Cllr Fredericks.

“As a district council, we need more money to buy land to build and run affordable housing,” she added.

And then ?

It is evident that English councils are increasingly keen, particularly in rural areas, to follow Edinburgh’s lead.

However, so far, the government seems reluctant to go further than the measures provided for in the bill. But perhaps if there is enough pushback from councils to suppress this issue, we could see the planning powers that have been extended to Edinburgh see similar treatment across the border.

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