Holiday lets and planning rules: what every Airbnb landlord needs to know…

You want to start generating income through Airbnb or a similar platform. And of course, you definitely don’t want this source of income to be nipped in the bud by your local council. Here, we take a closer look at the UK planning rules and at what landlords need to do to stay on the right side of the law…

Airbnb, Homeaway, Booking.com: why might the council be interested in your business?

Traditionally, when a homeowner has involvement with their local council planning office, it tends to be along the lines of new garages, loft conversions and kitchen extensions: i.e. significant changes or additions that require permission before work commences.

But let’s say you are about to list your property on Airbnb. It might require some minor internal alterations — but certainly nothing in itself that requires permission. So what’s the potential problem?

Landlords need to be aware that as well as major alterations to property, the planning framework is also concerned with material change of use. In simple terms, every property in England and Wales is prescribed with a particular planning use class; i.e. a description of what that property may be used for by its lawful occupants. You need planning permission to use the property for something other than the activities included in the property’s prescribed use class.

So here’s the big question: “Will I be able to rent out my property for short-term holiday lets without having to apply for planning permission for a change of use?”

And here’s the rather unhelpful answer: “It depends”. Yes it’s certainly possible — so long as the scale, frequency and nature of the letting activities do not mean that you stray out of your planning use class.

To illustrate this, here’s a closer look at what the law says…

When is a dwelling house no longer a dwelling house?

Your home — whether a flat or house — almost certainly has the planning use class C3, i.e. a “dwelling house as a principal or secondary residence”. It covers “those persons living together as a single household as what could be construed as a family” as well as “groups of people (up to six) living together as a single household”.

Will the fact that a dwelling house is used for holiday or commercial letting lead to a material change of use? The legislation that sets out the use classes is silent on the point. As such, it has been left to the courts to decide.

The point was considered in detail in the Court of Appeal case of Moore v SSCLG and Suffolk Coastal District Council [2012] EWCA Civ 1202. In that particular case, the landlord bought an 8-bedroom dwelling, previously used as a family home and used it for commercial holiday lets. The council issued a planning enforcement notice alleging an unauthorised change of use from C3 dwelling to use as commercial leisure accommodation. The landlord appealed the enforcement notice.

On the facts of the case, the Court of Appeal concluded that there had been a material change of use. The following is worth noting:

  • The property tended to be let by large parties — e.g. stag and hen parties (until they were discouraged by the owner), reunions, celebrations, at least one cycling group and yoga group. These were materially different to the family groups and shared households typical of a “dwelling house”.
  • The associated traffic movements were not typical of an ordinary dwelling house.
  • The likely frequency of party-type activities was high (certainly higher than one would expect of a dwelling house).
  • There was close proximity to a large number of neighbours (some within the same building)
  • There was a shared driveway and refuse bins, open ground and the potential for unintentional trespass.

The case illustrates the type of circumstances under which it is likely that a material change of use is deemed to exist. If you are letting to individuals, families or small groups (of six or fewer) who aren’t going to be partying, who aren’t going to be coming and going at unusual hours and, for instance, who aren’t going to be producing unusually high levels of refuse, it’s much less likely that a “material change of use” would be considered to have occurred.

It all depends on context — and it’s a question of fact and degree for the council planning authority to consider. Incidentally, courts only interfere with a planning decision if it is concluded that it was a decisions that no planning authority acting reasonably could have made.

Special rules for London

London is a special case. Previously, the old Greater London Council had passed a law specifically stating that any short-term let of less than 90 days was considered a material change of use. It meant that planning permission had to be applied for in all cases where occupants had paying guests staying for less than 90 days.

This law was temporarily suspended for the 2012 Olympics. Finally, in 2015, the Deregulation Act came into force, which stated clearly that so far as the council is concerned, Class C3 dwellings can be let for up to a maximum of 90 nights per year. If you wish to let your property out for longer than this each year, specific permission is required. It’s the reason why Airbnb now automatically limits entire home listings in London to 90 nights per calendar year — unless hosts confirm that they have the required permission to share their space more frequently.

Note that this law only applies to Greater London boroughs. Outside of the capital, planning officers are required to consider on a case-by-case basis whether there has been a material change of use.

Avoiding enforcement action: some practical tips…

Generally, the council will only investigate whether there has been an unauthorised change of use if it receives a complaint from another resident. So to keep on the right side of the planning permission laws, staying on the right side of your neighbours is highly desirable. With this in mind, consider the following:

  • Have strict limits in place on who can and cannot rent your property (e.g. no stag or hen groups, no contractors who are likely to be working unsociable hours, no groups of more than six persons).
  • Lay down the rules from the beginning (no parties, restrictions on parking, noise limits, rubbish collection).
  • Ideally, meet your tenants in person on the first day.
  • Pay attention to platform ratings. Airbnb allows previous landlords to rate their tenants.

What are the sanctions?

On receiving a complaint, your local planning department will investigate and put details of the complaint to you. Obviously, you cannot discount the possibility of an awkward neighbour putting forward a frivolous complaint, but what happens next depends largely on how comprehensively you are able to respond. If you can provide a full lettings history and if you are able to point to your listings adverts to show that you strictly control who rents the property, it can go a long way in proving that you are still within the Cat 3 use class.

If it is shown that you are in breach of use class planning rules, you will be served with an enforcement notice requiring you to cease the letting activity. Breach of such a notice can trigger summary prosecution. The maximum penalty for such a breach in the Magistrates’ Court is a fine not exceeding £20,000.

If your letting activities go beyond the parameters of what’s acceptable in a “dwelling house”, there’s always the possibility of obtaining planning permission for a change of use class from C3 to C1 (Hotels, Boarding Houses, Guest Houses). However, this planning application process can be both drawn-out and costly. What’s more, especially if it is met with residents’ objections, the application may have low prospects of success. While it could be worthwhile if short-lets are going to be your main source of income, it’s not an obvious route for part-time Airbnb landlords to go down.

What next?

Visit your local council’s website to see what specific guidance they give to short-term lettings landlords. This should give you valuable intel on what type of approach they take and what you need to do to stay on the right side of the law.

For further hints and tips on getting ready to become a short-let holiday landlord and to find the right mortgage, register with Copofi today.