New Airbnb rules to stop the ‘hollowing out’ of local communities – C5

Michael Gove has announced proposals to require planning permission for short-term lets, such as Airbnb, to tackle a “hollowing out” of communities.

The new law would require people letting out their property as a short-term holiday home to seek permission from the local authority under a new Use Class C5 category.

Local residents will be protected from being pushed out of their communities by excessive short-term lets thanks to changes in planning rules announced today.

Under the reforms councils will be given greater power to control short-term lets by making them subject to the planning process. This will support local people in areas where high numbers of short-term lets are preventing them from finding housing they can afford to buy or to rent.

These changes are part of a long-term plan to prevent a “hollowing out” of communities, address anti-social behaviour and ensure local people can continue to live in the place they call home.

Meanwhile, a new mandatory national register will give local authorities the information they need about short-term lets in their area. This will help councils understand the extent of short-term lets in their area, the effects on their communities, and underpin compliance with key health and safety regulations.

Short-term lets are now a significant part of the UK’s visitor economy, and can provide increased choice and flexibility for tourists and business travellers. To recognise this, homeowners will still be able to let out their own main or sole home for up to 90 nights throughout a year without planning permission and Government is considering how to apply the register so it does not apply disproportionate regulation for example on property owners that let out their home infrequently.

Secretary of State for Levelling Up Housing and Communities, Michael Gove said:

Short-term lets can play an important role in the UK’s flourishing tourism economy, providing great, easily-accessible accommodation in some of the most beautiful parts of our country.

But in some areas, too many local families and young people feel they are being shut out of the housing market and denied the opportunity to rent or buy in their own community.

So the Government is taking action as part of its long-term plan for housing. That means delivering more of the right homes in the right places, and giving communities the power to decide.

This will allow local communities to take back control and strike the right balance between protecting the visitor economy and ensuring local people get the homes they need.

Tourism Minister Julia Lopez said:

Short-term lets provide flexibility for homeowners and give tourists more accommodation options than ever before, but this should not prevent local people from being able to buy or rent homes in their area.

The Government is committed to getting the balance right to ensure both local people and our visitor economy can thrive.

Existing dedicated short-term lets will automatically be reclassified into the new use class and will not require a planning application.

The changes are part of the Government’s long-term plan for housing, unlocking more of the homes this country needs and meeting the target to deliver one million homes this Parliament, backed by £10 billion investment.

The Government also intends to introduce associated permitted development rights – one allowing for a property to be changed from a short-term let to a standard residential dwelling, and a second that would allow a property to be changed to a short-term let. Local authorities would be able to remove these permissions and require full planning permission if they deem it necessary.

Both of these measures are focussed on short-term lets, and therefore the planning changes and the register will not affect hotels, hostels or B&Bs.

Further details of these measures will be set out in the Government’s response to the consultations, including the timeline for implementation of the register, the use class and the individual permitted development rights – with the changes being introduced from this summer.

Linda Taylor, leader of Cornwall Council, welcomed the proposals to tackle the “escalating” number of holiday lets in the county.

 Alongside the introduction of the 100% premium on second homes from April 2025, I’m pleased the Government is providing the fiscal, planning and regulatory powers to help rebalance Cornwall’s housing market and allow us to provide even more decent and secure homes for local people and help all our communities to thrive.

Planning Geek thoughts on new Airbnb restrictions

Press releases and quotes are all well and good – but the devil is in the detail.

Here at Planning Geek we suspect this will only apply to short term holiday lets or Airbnb or better known as Serviced Accommodation (SA) that are let for 90 days or less. These will fall under Use Class C5.

The local authorities would need an Article 4 to block C5, however they could restrict longer Airbnb operations if these need full planning. An Article 4 will take up to a year to come into effect.

There will also be a permitted development right to go from C3 to C5. However, and very importantly, the Government has strongly hinted that this C5 will be limited to 90 days. Forcing all other AirBnB owners to go for full planning.

The added complication comes with properties that have had to obtain planning under C1 or Sui Generis Use Classes for their Airbnb operation. However most of these are run for 365 days a year. Where will they end up?

The Government has said that existing Airbnb operators would automatically fall under the new use class – this is great, except if the C5 is limited to 90 days. This will not be able to be extended by the local authority – it would need to be either full planning for Sui Generis or perhaps C6 for longer than 90 days. C6 would make more sense.

If you think about it, an Article 4 might block C5 for up to 90 days – it would be daft if an operator could simply say I am going to let my property for 91 days instead – it just isn’t going to happen. Longer will require planning. 

We also do not think the Government will automatically move all units into any Use Class beyond C5 as this would give rise to issues in areas like London limited to 90 days.

Therefore we see the following scenarios playing out….

• C5 – short term holiday lets or airbnb of up to 90 days. Automatically going from C3 to C5 unless blocked. All existing units moved into C5 automatically. 
• C6 or Sui Generis – short term holiday lets of over 90 days.
• Existing Airbnb operators falling under C5 and therefore requiring planning to operate for more than 90 days.
• New register for all Airbnb or short term holiday lets

The devil will be in the detail. As soon as the Government brings forward legislation, we will bring it to you first here on Planning Geek. We hope we are wrong!