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Switch to short lets “catastrophic” for long term rentals - claim

ARLA Propertymark has released details of its written response to a Parliamentary committee investigating the impact of Airbnb-style short lets on the wider rental market - and it pulls no punches on the potential dangers.

Earlier this year the House of Lords Built Environment Committee opened an inquiry into the impact of short-term lettings on housing markets. 

In response to claims by some elements of the short let industry that there was no link between short-term let growth and housing shortages, ARLA Propertymark provided its own briefing to the committee in June; this has now been released on the Propertymark website.


It says its concern over the impact of short-term lettings can be summarised in three main points. 

“Firstly, tenants are currently struggling to find homes and an unregulated increase in short-term lettings would only make finding a home more difficult. Secondly, we are seeing landlords sell their rental properties and leave the Private Rented Sector. Thirdly, there are few alternatives to people looking for homes outside of the Private Rented Sector. Overall, people are finding it more and more difficult to find a home. With the market strained as it is, any further decrease in the availability of long-term rents will have significant consequences for renters.”

ARLA Propertymark says its research shows of the 23 per cent of landlords who offered short-term tenancies in 2019, 12 per cent did so by changing properties from longer term tenancies to short-term. Extended across the UK’s landlord population, this potentially means 46,000 properties had been taken away from the private rented sector since 2015. 

It adds that given the current state of the Private Rented Sector since 2019 “large numbers of landlords switching to the short-term lettings is a likely scenario.” 

It says the most cited reason behind landlords planning to reduce or sell portfolios was the raft of existing and promised legal changes. 

Propertymark told the Lords committee: “This is reflected in the main reasons why landlords switch to short-term lets: 46 per cent due to the greater flexibility afforded by short-term lets, 37 per cent because regulations on long term lets are too burdensome, 31 per cent because they can charge higher nightly rents. 

“This suggests that there are several incentives for landlords to move into the short-term lettings sector. Research published by the University of Manchester found that the average two bed flat in Manchester City Centre and Hulme could generate between 1.7 and 2.9 times the amount of rent that it could through long-term rent. This is with an 80 per centr occupancy rate. Even if legislation caps the number of days landlords can rent out a property for short-term let, short-term lettings can still be more profitable for landlords.”

The trade body goes on to tell the committee of six recommendations to avoid what it calls the “catastrophic implications” of more long term lets switching to short lets. These are:

1. Any legislative changes should ensure that local authorities have appropriate regulatory powers to balance the needs and concerns of their communities with wider economic and tourism interests. This will require localised solutions rather than a ‘one-size-fits-all approach. 

2. The government must carefully consider the impact of any new regulation on the private rented sector if it would incentivise landlords to start using their properties for short-term lets, thereby reducing housing supply for local people. 

3. The government should consider extending current health and safety requirements as well as tenant protections for short-term lettings. 

4. Ensure that there are adequate enforcement procedures in place if day limits are imposed on short-term lets. 

5. Any legislation will need to distinguish between one person’s property being used for short-term lets when it is under-utilised and larger commercial landlords renting out entire properties on a full-time basis. 

6. Consider introducing limits on short-term letting activities in areas in which there is a demonstrable impact on private rented housing supply. 

  • Peter Hendry

    Fair points. The private rental sector is unable to cope right now, let alone later, unless a more balanced approach is taken.

  • icon

    Ridiculous report. Immigration is the problem, especially illegal immigration. Arla and similar organisations are just playing the government tune. I suspect gongs will follow when the PRS is ruined.


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