Karen Buck, MP for Westminster North, has warned that illegal sub-letting and property magnates are using Airbnb and other sites to collect tax-free income.
Short-term lets can earn up to three times the income of traditional rentals. Westminster Council estimates that the short-term rental of a two-bed flat can earn as much as £1,800 a week, compared with a short hold tenancy, which would earn £620 for the same period.
The number of short-term lets has risen by 126% in London since 2015, and Edinburgh, Bristol, Brighton and Manchester are now following the trend.
They may simply be trying to earn a little extra, but many people renting out their homes are unaware that the practice carries a legal responsibility, and may affect the terms of their insurance or lease.
Ms Buck suggests that growth in short-term letting has also contributed to a loss of available residential accommodation and wants the 90-day limit for renting out homes each year to be enforced. Not everyone renting out their homes considers how their neighbours are affected, and they are sometimes left to deal with the issues of anti-social behaviour and additional noise and waste, amongst other problems.
Illegal sub-letting is becoming an increasingly commercial operation, with property owners seeking increased financial gains. Ms Buck told MPs: “While I welcome the freedom for homeowners to let their properties for such purposes without excessive bureaucratic interference, it is difficult and expensive for cash-strapped councils to police the rules.”
Ms Buck brought in the Short and Holiday Let Accommodation (Notification of Local Authorities) Bill, which has cross-party support but will need the backing of the government before it can become law.
She said: “What I believe is now necessary and what this short Bill aims to do is to introduce a light-touch online notification system that is mandatory for homeowners to complete, merely confirming the dates their property is to be used for short-letting. It is not asking permission, it is merely allowing local authorities to know where short and holiday lets are taking place so they are able to effectively enforce.”
Ms Buck agrees that people should be able to make good use of their homes and earn extra cash, but she said: “Let’s make sure this doesn’t intensify the housing crisis, land costs on others while sharing none of the rewards, and inflict misery on long-term residents who, to their shock, can find themselves waking up in a hotel annexe but after all the hotel caretakers have gone home.”
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