Airbnb properties and similar short-term lets have been on the radars of global governments for some time. While they invariably encourage tourism and inject money into local economies, critics believe that an overabundance of holiday lets is choking the real estate market, and making it harder for local people to find somewhere to live.
In light of this, the UK government has announced changes to the law around short-term lets. The headline news is that councils will have more power to control holiday lets in their area - but what they do with that power is open to question. Here’s everything we know about the changes to short-term letting, and how they could affect holiday firms.
What are the changes to short-term lets?
The new changes affecting Airbnb owners were first touted by Prime Minister Rishi Sunak in March 2023. At that time, the focus was on clamping down on antisocial behaviour in Airbnbs, which were often used to host parties, and sometimes set up with this specific intention in mind. Airbnb had already acted to introduce a global ban on renting properties specifically for parties, but some owners and guests continued to flout this.
The new changes address this, but are also focused on reducing the amount of housing stock occupied by buy-to-let landlords, in an attempt to address a national housing shortage. Anyone renting out their home for more than 90 days in a given year will now have to register it with their local authority. The property will have a new “use” category which identifies it as being a short-term rental, allowing councils to make more informed decisions about where short-term rentals are permitted, and how many are allowed.
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Some changes had already been introduced in recent years to limit the use of housing for Airbnb rentals and other short-term lets. London for instance had already introduced a ban on letting your property for over 90 days, while also codifying the ability to let it out for less than 90 days without having to obtain permission from the Greater London Council. The new law also comes on the back of a 100% premium on second homes being introduced in April 2025, and more stringent safety standards in the Building Safety Act 2022, making buy-to-let properties less appealing than they had been previously.
How are Airbnb owners likely to be affected?
Airbnb owners in London will be completely unaffected by the new law, as they are already prevented from legally letting a property out for more than 90 days a year. This may be a negative for Airbnb customers looking for rentals in London, as the price of remaining properties has in many cases been elevated to compensate. For Airbnb owners, however, the picture remains the same, and they will not have to register their properties under the new regulations.
Airbnb owners outside of London also do not have to register their properties if they rent them for less than 90 days each year. Note that this period can be non-consecutive, referring to total days in a calendar year rather than a single block. This means that renting out your main or second home for up to 90 days while you are not occupying it remains an attractive option, allowing you to maximise the value of your property.
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For Airbnb owners for whom letting is a primary part of their income, however, the new regulations could prove tricky. The government has given the ultimate decision-making power to local authorities, making the application of the law broadly contingent on them. While you will have to register your property if you let it out for more than 90 days a year, this doesn’t necessarily mean that the local authority will do anything about it. Indeed, if you have already been letting a property for a long time prior to the law, it seems unlikely that a city or county council will suddenly prevent you from doing this.
What is likely to follow is a lengthy period of consideration and consolidation. Councils will first need to wait for the registrations to be completed, and the data made available to them. Once this has happened, they can then decide what to do with it. If they perceive that Airbnbs are a help to the local economy, and that there is enough available housing stock, they may not do anything at all. Any action might be contingent on where the properties are, and could also be limited to new registrations after a certain period, rather than existing ones. Any registration now should be made with the proviso however that permission could be denied further down the line, forcing the property to either be let for less than 90 days a year, or sold.
Ultimately, the government has passed the buck to councils over action on Airbnbs and other short-term lets. Whether they act and to what extent remains to be seen. Action could be dependent on a range of factors, from the density and location of properties and availability of local housing, to the political leanings and campaign promises of local councils and MPs as we enter an election year.
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While the news and other recent changes may make Airbnbs and other short-term lets less attractive, they remain a great way to capitalise on empty or second homes, harness tourism growth in up-and-coming areas, and provide a valuable service to holidaymakers. To learn more about starting a lettings business and formalising your investments in Airbnb or other rental properties, feel free to get in touch.
