Government seeks feedback on plans for a new ‘use class’ for short-term lets

On April 12, 2023, the government published a consultation to introduce a separate use class for short-term lets and associated permitted development rights in England. Amanda Marwood and Zakira Vika from our commercial property team explain the reasons behind the consultation and how it may affect the leisure and tourism sector.

Currently, a domestic dwelling falls within Use Class C3 which makes no distinction between a dwellinghouse being used as a main residence, or if it is rented out on a short-term or long-term basis (typically under an assured shorthold tenancy arrangement).

The consultation proposes to introduce a new C5 use class for short term lets of this nature. The proposed description for this new use class is ‘the use of a dwellinghouse that is not a sole or main residence, for temporary sleeping accommodation for the purpose of holiday, leisure, recreation, business or other travel.’

The objectives behind the government’s proposals

Short term lets are an integral part of the country’s tourism and visitor economy.

The scope of the consultation is to address concerns about the increase in the numbers of short term lets in certain areas (such as coastal towns, national parks and some cities) and the impact this can have on the sustainability of communities, and the availability and affordability of homes for local people.

The government hopes the proposed changes will help local areas impacted by these problems by giving them greater control of any future increase in the number of short term lets in their area, while providing flexibility where the issue of short term lets is not a problem.

Should this come into effect, existing properties would either fall into the new class C5 or the dwellinghouse use class C3. A change of use between these two classes would require planning permission from the local authority if there is a material change of use.

In addition, the government is looking to allow continued flexibility to use properties as short term let where they do not create issues to local housing. The government proposes to do this by way of permitted development rights alongside the new use class to allow changes of use from C3 to a C5 use, and to allow changes of use from C5 to C3.

However, in areas where there are local issues, the local planning authority will be able to remove these permitted development rights by making an Article 4 Direction.

While it is not proposed that the new permitted development rights should be subject to any conditions or limitations, it is proposed that the local planning authority should be notified whenever permitted development rights are used.

Have your say on the proposals

The government is encouraging the public and businesses affected by the proposals to share their views through an online survey relating to how the scheme should be set up and administered.

The survey can be accessed here and closes on June 7, 2023.

The consultation is seeking:

• Views on whether to provide a degree of flexibility for C3 dwellings and houses to be let out for a specified number of nights. This could, for example, be where homeowners are away on holiday, or offer their home during local sporting or other events, or where the owner works away, all while retaining the property’s use as a main or sole dwellinghouse.
• Feedback on whether the number of nights should be 30, 60 or 90 nights a year with planning permission continuing to be a requirement where a Class C3 dwellinghouse is let out for longer than the specified number of nights in a calendar year where it would be deemed a material change of use.
• Views on any potential impacts on businesses, local planning authorities and communities from the proposed measures. The government is mindful of its responsibility to have regard to the potential impact of any proposals on the Public Sector Equality Duty, therefore views are additionally sought on whether there are any impacts arising from these measures on those with a protected characteristic.

The extent to which these proposals will impact local communities as well as the leisure and tourism sector remains to be seen, with further updates expected after the government consultation period ends in June.

If you offer your private residence as a short-term holiday let you may be affected by any decision to change the current classing of housing. We therefore encourage you to have your say on the government’s proposals by completing the survey.

For further advice regarding changes to the classing of short-term property lets please contact Harrison Drury’s leisure team on 01772 258321