Local authorities and city governments must have more power to regulate short term rentals, if popular UK and European travel destinations are to cope with the expected rise in demand for holiday accommodation, finds a new report by UCL researchers.
The authors argue that without stronger regulation and cooperation from digital letting platforms, cities, rural and coastal areas face possible shortages in housing stock as more properties are let out to holiday makers and so-called digital nomads, who work remotely and can afford to temporarily relocate.
In launching the new report, published by the Property Research Trust , lead author Professor Claire Colomb (UCL Bartlett School of Planning) called for councils to have more regulatory powers.
"Local governments need to find a middle ground between maintaining their cities’ attractiveness to visitors while tackling housing inequalities, protecting long-term residential uses and quality of life," she said.
"City councils and governments need tools to regulate short-term lets and enforce regulations in an effective way. This requires appropriate national legislation and the full collaboration of digital platforms."
For the report, experts from UCL and Oxford Brookes University examined 12 large European cities, finding that many struggled to cope with the rise in demand for short-term accommodation before the pandemic.
The short term rental (STR) market had boomed in the years prior to the first lockdown, with properties let through digital platforms such as Homeaway and Airbnb. Whilst the sector brings local economic benefits, it can also contribute to a shortage in housing and to more social disturbances in popular areas.
The London Plan, which is the strategic plan for the city drawn up by the Mayor of London and approved in March 2021, states that "the use of dwellings as short-term holiday rentals can have a detrimental impact on neighbours’ residential amenity and community cohesion in the wider area where concentrated in a particular location... and reduces the supply of homes available for people to live in." These issues are mirrored in small, popular villages and towns.
Professor Colomb said: "The issues that can arise from STRs partly occur because a significant proportion of the market is composed of professional landlords or investors managing several properties, over individual households occasionally renting out their home for extra income.
"At the end of 2019, the share of Airbnb listings that were available for more than 60 nights a year (suggesting they are let by professional landlords) ranged from 24% in Berlin to 42% in London, 66% in Prague, 67% in Barcelona, 85% in Lisbon and 88% in Rome. In the last four of these cities, nearly two thirds of listings were by hosts advertising more than one property."
The Deregulation Act of 2015 allows homeowners in London to rent their properties for no more than 90 days per year without requiring planning permission. However, many properties are rented out the whole year round without permission. This is difficult to track and quantify as there is no legal requirement for digital platforms to share data about properties they advertise. Outside of London there is no time limit and it is difficult for local authorities to control the market.
As the gradual easing of restrictions leads to increased national followed by international mobility, the researchers predict this will reignite pressures on local housing markets and conflicts over the impacts of STRs.
In the last few years, the Mayor of London, London Councils, housing specialists and the All-Party Parliamentary Group (APPG) for Tourism, Leisure and the Hospitality Industry have called for national legislation that would allow the implementation of a light registration scheme for STRs, as well as more powers for local authorities to control the use of residential properties for short-term accommodation.
The report authors point to Scotland as a positive example. In February 2021 the Scottish Parliament approved a law that enables a planning authority to designate all or part of its area as a short-term let control area and require planning permission to use any property as an STR. Draft legislation creating a licensing scheme for STRs is likely to be presented to the Scottish Parliament in June 2021.
Other European cities including Paris have taken steps to better regulate STRs through online registration schemes, stricter controls and different rules for professional and occasional hosts.
Co-author Dr Tatiana Moreira de Souza said: "For a proper regulation of STRs, the collaboration of digital platforms is essential. Both national and European legal frameworks need to be revised to require digital platforms to advertise STR registration numbers and share listings with local authorities, which is now the case under French law for large cities such as Paris."
The study focused on 12 large European cities: Amsterdam, Barcelona, Berlin, Brussels, Lisbon, London, Madrid, Milan, Paris, Prague, Rome and Vienna. The researchers analysed a wide range of primary and secondary sources, including public statements by specific interest groups, policy and regulatory documents, legal decisions and court cases, media articles and around 50 interviews with representatives from city governments, residents’ associations, grassroot campaigns, the hotel industry, home-sharing clubs and professional organisations of STR operators.
Professor Sarah Sayce, (Reading University and Chair of the Property Research Trust) said: "This report shines much-needed light on a surprisingly complex issue of great importance to the citizens of many UK and European towns and cities. Now that we are seeing the first signs of the Covid-19 pandemic coming under greater control in Europe, the report’s timing could not be more appropriate. I hope that Claire Colomb’s and Tatiana Moreira de Souza’s research will help to produce a reasoned and measured debate around the issue."