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London Council Urges Stricter Regulations to Address Short-Term Rental Challenges

Published by UK Property Accountants
Published Date: September 29, 2023

London, UK - Westminster Council is sounding the alarm over the escalating challenges posed by short-term rentals, particularly on platforms like Airbnb.

They argue that this issue is rapidly evolving into an 'enforcement nightmare,' prompting a call for stricter regulations and the introduction of a compulsory registration system for short-term let properties.

A Growing Issue in Westminster

Westminster, renowned for its iconic landmarks and bustling atmosphere, is grappling with a surge in Airbnb listings that outpaces every other London borough. 

Startling statistics reveal that a staggering 11,800 properties were offered for short-term rentals in the area between January and July of this year.

Westminster Council

One striking example highlights the severity of the situation. A single building in Westminster boasts nearly as many nightly rooms as the luxurious Ritz hotel, with 98 rooms compared to the Ritz's 111.

However, the contrast in contributions to the council's finances is staggering. While this building only added £92,000 to the council's coffers through council tax, the Ritz hotel paid a remarkable £2.27 million.

The Council's Concerns

Adam Hug

Council Leader

The rise of Short-Term Lets has fundamentally disrupted a level playing field for many of Westminster's hospitality establishments. Traditional providers diligently adhere to business rates, Corporation Tax, and regulatory compliance, in stark contrast to the small business exemptions enjoyed by short-term lets.

Furthermore, Hug sheds light on the challenges faced by residents who have endured disruptive noisy parties, adding, "Overall, there is minimal regulation, resulting in an enforcement nightmare for our city. This has created misery for long-term residents who find their neighbours replaced by party flats."

Furthermore, he recounted a distressing message from a resident saying

'They initiated a loud party shortly after 11 PM, with deafening music echoing above us. The crowd keeps growing even now. This is not the first time; they make sleep impossible.' Should this resident be burdened with the clean-up costs through their council tax?

Proposed Solutions

The council is now advocating for a modest levy on Short-Term Rentals and seeks the authority to impose penalties on unregistered hosts. Hug elaborated, 

"As we confront potential cuts in the tens of millions over the next few years, we must contemplate whether London's local authorities should have the discretion to levy a nominal fee on short-term lets, similar to hotels, as seen in cities worldwide".

He emphasised the potential benefits of such a levy, stating, "This revenue could be reinvested in initiatives ranging from maintaining clean streets to ensuring public safety. Considering the impact of events like the King's Coronation, which drew millions to Westminster, this proposition warrants serious consideration."

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Westminster Council is also calling for a return to the pre-2015 regulations in London, where short-term letting of entire residential homes necessitated planning permission, and the council held the authority to curtail short-term lets in specific areas.

This issue has garnered national attention, with a government consultation on the introduction of a registration scheme for short-term lets in England. This consultation closed for submissions in June this year. The outcome is poised to significantly influence the future landscape of short-term rentals not only in London but also across the nation.

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Conclusion

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