Landlords could be granted an ‘enormous escape hatch’ to convert homes into short-term let properties to avoid new rules, the Council Leader has warned.
Chancellor Jeremy Hunt is set to use tomorrow’s Budget to announce new curbs on Airbnb-style lets, in a £300million tax on those renting out their second homes.
New regulations announced by the Department for Levelling Up, Communities and Housing will also create a registration scheme and require owners to obtain planning permission to let out their properties short-term.
But Westminster council leader Adam Hug voiced concerns that a loophole could allow landlords to convert their properties before the new rules take effect, the Evening Standard reported.
In a letter to Housing Secretary Michael Gove, he warned that a ‘generously sized escape hatch’ would allow landlords to evade regulation and ‘rob the private rented sector of thousands of homes’.
He said that the real ‘losers’ would be people looking to rent a home in Westminster.
Mr Hug said: ‘If Budget speculation is correct the Chancellor is preparing to tighten up regulation on short term lets, which is something we’d welcome.
‘But at the same time Michael Gove is holding open a generously sized escape hatch for landlords who want to escape any regulation at all, which will effectively rob the private rented sector of thousands of homes.
‘While the principle of a mandatory registration scheme is the right one, we are keen to see the detail to make sure hosts are accountable for any illegal activity from excessive noise to dumping waste.
‘We are deeply concerned by the proposal that properties which are already used for short-term letting are automatically exempt from the need for planning permission.
‘Our data suggests that at least 10,500 homes would meet the proposed definition of short-term letting – equivalent to homes for over 25,000 people – and so would be permanently removed from the residential market should the proposals be brought forward in their current form.’
In recent years, a spotlight has been shone on the high number of property lets targeted at tourists amid a shortage of homes. Westminster currently has 4,000 on the housing wait list.
A separate letter signed by the council leader as well as the CEOs of local branches of Age UK and Citizens Advice called on the Chancellor to maintain the Household Support Fund, which supports 31,000 families with cost-of-living struggles, including providing supermarket vouchers to 8,400 children since last April.