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Michael Gove announced key changes to planning and regulations for short-term and holiday let properties. What does this mean for existing holiday let owners and the future of the sector as a whole?

Michael Gove has announced that, from this summer, tighter planning regulations will be introduced to the short-term lettings market. Most notably, you will need to get planning permission from the local council to let out your property as a holiday let.

A new mandatory national register will also be created to monitor the number of short-term lets across England, specifically in tourist areas. Furthermore, homeowners will need to acquire planning permission if they want to let out their main and sole property for over 90 nights a year.

Gove says these changes will give people “more control over housing in their cherished communities.

“We know short-term lets can be helpful for the tourist economy, but we are now giving councils the tools to bring them under control so that local people can rent those homes as well.”

What does this mean for the holiday let sector?

With these changes, a new planning use class will be created for short-term lets. It’s important to note that existing dedicated short-term lets will automatically be reclassified into the new use class and therefore will not require a planning permission application.

There will also be new associated permitted development rights, allowing a property to be changed from a residential dwelling into a short-term let, or vice versa. These planning changes will not impact hotels, hostels, and B&Bs.

Understandably, local councils in tourist areas want greater control of the number of holiday lets in these locations to allow more locals to live in their hometowns. However, some industry experts have noted that this new regulation unfairly targets the holiday let industry.

Andy Fenner from the Short Term Accommodation Association comments, “The holiday-let industry is doomed to continue being unfairly regarded as tourism’s problem child, second-best to hotels, and unjustly taking the brunt of the blame game surrounding housing supply and affordability, despite the lack of a proper evidence base.

“The presumption is that, if you shut down all short-term rentals tomorrow, the housing crisis would be solved but that is naive in the extreme.”

However, tourism minister Julia Lopex notes that “The government is committed to getting the balance right to ensure both local people and our visitor economy can thrive.”

Holiday lets have become an increasingly popular investment type amongst landlords, offering generous rental yields and growing demand. With this regulation to come into play from the summer, for landlords actively considering investing in a holiday let, now is the time to get started. Alternatively, these changes may encourage clients to look to purchase existing trading holiday let properties to mitigate the planning permission application. Either way, it's worth discussing your plans with our expert brokers.

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