The government must get its house in order on the home sharing economy

January 29th, 2018

Airbnb rentals grew by 50 per cent in London between 2016 and 2017. [1]

A new report out today by London Assembly Member Tom Copley is calling for more effective regulation of short-term lettings to clamp down on people who break the law by turning their homes into hotels by the back door.

The massive growth in the sharing economy has gazumped the government and radically transformed the short-term rental market in London. Airbnb was founded in 2008 and a decade later now lists over a million properties in many different cities across the world.

Local and national governments have been slow to adapt. Airbnb and other home-sharing platforms have become embroiled in bitter political battles over the lack of housing supply and increasing amenity pressures on some local communities. Sharing platforms are not the primary cause of the strain on long-term housing, but the huge growth in the sector is adding pressure. It’s clear that short-term letting platforms are here to stay, so it’s crucial that the regulatory framework is robust.

In 2015, the Government’s Ministry of Housing, Communities & Local Government changed the law around short-term lets when it limited short-term letting of whole residential premises in London to a maximum of 90 days in a calendar year.  [2]

However, London boroughs have never had immediate access to any information that confirms a property is being used for short-term lettings and there is no requirement to notify a borough of such an intention or use. Instead, the impetus is on boroughs to prove that a home is not only available for 90 nights a year but has been booked and occupied.

Without accurate data on the number of nights booked, boroughs are only alerted through reports from local residents, requiring pro-active evidence gathering by the local authority. Without access to data, it is impossible to investigate and effectively enforce against breaches in short-term lettings. [3]

From 1st January 2017, Airbnb chose to voluntarily enforce the 90-day limit, but so-far other platforms have been slow to follow suit. A recent report by Airbnb found that in the year since the enforcement was introduced properties booked for more than 90 nights had dropped from 21 per cent of the total to 7 per cent. [4]

The Labour London Assembly spokesperson on Housing, Tom Copley said:

“Airbnb’s decision last year to voluntarily enforce the 90-day limit on short-term lets was a very welcome step forward, but they’re no longer the only player in the market. It’s vital that they and other short-term rental platforms continue to engage with local communities and city authorities. They should be looking to work with national and local government to help lay the right regulatory framework to protect long-term housing and build cohesive communities. 

“Let’s sort out information sharing immediately – for everyone’s peace of mind. Cash-strapped local authorities are struggling to enforce against people who turn their homes into hotels by the back door. We need home-sharing platforms to share data with councils to help them target the minority of hosts who abuse the system.

“Government should also legislate to require that short-term lettings hosts register with their local authority. This should be simple and free.  None of this is rocket science – it’s simply catching up with and effectively regulating new technology.

“I’m horrified that breaches of security, especially around door codes, are accompanied by anecdotes of extreme problems for neighbours, including confrontations with guests and properties being used for parties or even brothels. Given these impacts on neighbours, it is unsurprising London’s most affected local authorities are so concerned about the issues raised by short-term lets. Let’s give them the tools they need to clamp down on abuses of the system.”  

Ends

Notes

  1. GLA (2017) Housing in London: 2017 The evidence base for the Mayor’s Housing Strategy available at: https://files.datapress.com/london/dataset/housing-london/2017-01-26T18:50:00/Housing-in-London-2017-report.pdf [Accessed 14.8.17] pg.67
  2. DCLG (2015) Promoting the Sharing Economy in London: Policy on short-term residential use in London p6.  Properties cannot be used as temporary sleeping accommodation on a permanent basis throughout the year, and any impact on local amenity is kept within acceptable limits.
  3. Evidence of Councillor, at the Short-term Lets in a Housing Crisis Roundtable, City Hall, 21/2/17
  4. Airbnb, (2017), Bringing You Home Sharing By Region, pg.46
  5. Tom Copley AM’s report ‘More BnB? Short-term Lets in London’s Housing Crisis’ recommendations include:
  • The Mayor of London should continue to put pressure on platforms to voluntarily share their data with local authorities to assist with enforcement activity. If voluntary measures are not effective then the Mayor should campaign for the government to change legislation to force websites to hand over the details of property owners suspected of for breaking the 90 day year limit on short-term lets.
  • The Mayor should encourage home-sharing platforms to follow Airbnb’s lead by voluntarily enforcing the 90-day limit.
  • The Mayor should lobby the government to hand over to the Mayor of London the power to determine applications from boroughs to ban the renting out of whole properties for short-term lets using Article 4 directions.
  • The Mayor should lobby the government to legislate that short-term lettings hosts must register with their local authority. This should be a simple and free process.
  • The Mayor should write to local authorities asking them to ensure their leasehold agreements require that the property be used as a permanent residence and write to all their leaseholders informing them of this.
  • The Mayor should write to Housing Associations and ask them to write to their shared ownership leaseholders reminding them that they must not sub-let their home, including on a short-term basis.
  • The Mayor should write to short-term lettings management companies asking them to advise homeowners of their legal obligations, and to refuse to let a property for more than 90 days without planning permission.
  • Home-sharing platforms should consider creating an ombudsman paid for by the industry to prevent home-sharing fraud, help with enforcement, solve resolution disputes, investigate complaints, and help redistribute the responsibility for enforcement away from cash-strapped councils. The Mayor should facilitate a discussion with home-sharing platforms on this.