More short-term let regulations coming, says PM

The government is looking to put more controls on short-term lets in England.

Politicians have been working on a national registration scheme, following a consultation carried out under the previous government. Since earlier this year, councils in England have also been able to charge second home owners up to 100% extra council tax.

But in an interview last month, Prime Minister Kier Starmer said that registration was “basically stage one”. While he didn’t go into detail, Labour politicians talked before the 2024 election about letting councils limit the numbers of local holiday lets.

Market effects

Short-term lets have been blamed for taking stock out of the long-term rental market and driving up rents.

However, many won’t be affected by the council tax surcharge. Owners of short-term lets in England can pay business rates instead of council tax as long as it is available to rent for 140 nights a year, and rented for at least 70.

Even so, in some areas, the council tax surcharge appears to be reducing the number of second homes even before further reforms. Earlier this year, estate agents in Cornwall reported falling demand for second homes as the council hiked taxes.

Tougher measures could cause a second home sell-off, as they might have in parts of Wales. In Q4 2024, house prices fell by over 12% in Gwynedd, where the council requires planning permission to turn homes into holiday lets or second homes and also charges 150% extra council tax. In Pembrokeshire, second home owners pay an extra 200% and prices fell 8.9% in Q4 2024.