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Is regulation coming to holiday lets?

Nadeem Raziq BA (Hons), FCCA, ATT
Head of Tax

A review into the impact of increases in short-term holiday lets has been launched by the Government, indicating that regulation could soon be coming to the holiday let market.

The number of holiday lets in England has risen by 40% in three years, according to analysis of council figures by the BBC. Popular tourist areas - including Whitby, the Isle of Wight, North Devon, the Cotswolds and Norfolk - have seen particularly sharp increases.

Government launches holiday let review and Call for Evidence

Due to this increase, the government has launched a review into the effect of short-term holiday lets which will seek to improve the holiday letting market for those living in popular tourism destinations.

The scheme, proposed in a new government review of short-term holiday lets, could involve physical checks of premises to ensure regulations in areas including health and safety, noise and anti-social behaviour are obeyed.

Further measures the Government is considering include a registration ‘kitemark’ scheme with spot checks for compliance with rules on issues such as gas safety, a self-certification scheme for hosts to register with before they can operate, and better information or a single source of guidance setting out the legal requirements for providers.

Tourism minister, Nigel Huddleston, said: “We’ve seen huge growth in the range of holiday accommodation available over the last few years.

We want to reap the benefits of the boom in short-term holiday lets while protecting community interests and making sure England has high-quality tourist accommodation.”

Housing minister, Stuart Andrew, said: “Holiday let sites like Airbnb have helped boost tourism across the country, but we need to make sure this doesn’t drive residents out of their communities.

“We are already taking action to tackle the issue of second and empty homes in some areas by empowering councils to charge up to double the rate of council tax.

“This review will give us a better understanding of how short term lets are affecting housing supply locally to make sure the tourism sector works for both residents and visitors alike.”

What this means for holiday let owners

Responding to the Government’s review, Provestor’s Head of Tax, Nadeem Raziq, said:

“We are certainly seeing an increased appetite from investors to branch out to popular tourist destinations to benefit from the demand in holiday lets in the UK.

“Investors should be aware of both the set up costs of such properties and the on-going restrictions many local councils will place on such properties. There are almost certainly going to be further restrictions put on landlords to ensure better quality control (meaning more admin and costs incurred by landlords annually).

"It remains to be seen whether local councils put in place tax levies or increase in business rates on such properties. Landlords should certainly plan for potential increases in compliance when considering such businesses.”

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Holiday let owners: Have your say

The government wants to gather the evidence and data to inform any future steps and it wants to hear the views of all parties, including holiday let owners, online platforms, accommodation businesses and local authorities.

Submit your feedback to the Call to Evidence here

Guide to furnished holiday let tax

Learn about the tax advantages of furnished holiday lets in our expert guide.

Read the guide

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Nadeem Raziq BA (Hons), FCCA, ATT
Head of Tax

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