Emerging Developments in the Short-Term Rental Sector in the UK

The UK Short Term Accommodation Association (STAA) held a panel discussion on emerging developments in the short-term rental sector in the UK, kindly hosted by Airbnb at their London headquarters, on Wednesday 21 March 2018.

The panel:

  • Shomik Panda: STAA Director-General (Moderator)

  • Natasha Mytton Mills: Airbnb UK & Ireland Public Policy Lead

  • Merilee Karr: STAA Chair & CEO, UndertheDoormat 

  • Jean-Philippe (JP) Monod: Head of Corporate Affairs, Expedia

  • Edouard Peers: onefinestay General Counsel

Key discussion points:

1. Proposed new regulatory measures

The discussion focused on the Deregulation Bill 2015, which allowed short-term rentals for up to 90 days in London and without limit outside of London, as well as the Scottish Advisory Panel on the Collaborative Economy, which produced a report with regulatory recommendations in January 2018. Big cities in the UK have been looking to London, and will likely follow where London leads. Cities such as Oxford and Liverpool are interested in implementing the kinds of registration schemes or licensing schemes that have been talked about in London.

We focused on registration schemes, and the wide variety of such schemes that have been implemented in Europe and elsewhere. Some have been successful, such as Portugal’s simple online declaration system, whereas others such as that in Paris have been impossible to enforce and simply added layers of bureaucracy without tackling the issue. Of particular concern is the possibility that schemes that oblige initially only a simple declaration morph into licensing schemes, which are likely to deter casual home-sharers, potentially cutting off for some people an important additional income stream.

2. Initiatives to aid law enforcement and self-regulatory initiatives

The STAA has recognised that critiques of the industry tend to be motivated by three things: concerns around affordable housing, concerns around standards, and concerns around residential amenity. Our response to all of these concerns was outlined by the leadership team. 

The STAA Code of Conduct is a baseline measure, designed to ensure that all of our members are compliant with the law and meeting all the basic best practices we want to have as an industry. The STAA Best Practice Buildings Policy is designed to ease residential amenity concerns by setting standards for how short-term letting within a building should be carried out to ease issues with neighbours. The STAA has agreed to jointly roll it out with a central London borough, and specifically agreed a joint implementation scheme with a Great Estate. Finally, the STAA has been working on an information sharing scheme which will allow local authorities to more effectively implement the law, to avoid landlords renting out 365 days a year, potentially impacting housing supply in constrained areas, and we are in discussions with local authorities at both city and borough level about rolling it out.

The importance of gaining accurate information regarding the industry’s impact was also discussed. Stories around residential disturbance are forms of anecdotal evidence, and while there is no denying that there are issues associated with it, we should always place the number of complaints related to short-term rentals in a wider perspective.

The panel also talked about cooperating with local authorities, and how we believe that it is the future of industry-authority relations. The work that the STAA is doing with London authorities is among the first of its kind. A divided industry will have regulation foisted upon it; a united one will be able to shape new rules so that they take the industry’s suggestions into account on how to solve the challenges of a growing industry. Working with local authorities as an association allows us to create opportunities, rather than simply solve existing issues.

3. Local regulatory initiatives

London and Edinburgh are the two biggest hotspots of activity, but Liverpool, Oxford and other cities have indicated a desire to introduce new regulations. Within London, boroughs such as Kensington and Chelsea, Tower Hamlets and Camden are seeking to introduce limits on short-term rental activity. Boroughs and local authorities are also seeking to work together to lobby for change at a macro-level.

Q & A

Are politicians buying into the STAA’s vision and its work?

Lack of trust in the industry is not an apparent issue at the moment. Politicians are appreciative of steps that have been taken, although some do want more to be done.

Is there a risk of EU-wide intervention?

This does not seem likely in the near future. Regulation in this space is seen as a national initiative, and big players in the EU such as France, Germany, Italy and Spain are not interested in devolving these powers away from themselves. Intervention at this macro-level would likely be a good thing. Firstly, EU-wide rules would be more coherent and reduce fragmentation. A highly fragmented environment, such as the one we see in the US, where every individual city and in some cases individual neighbourhoods have specific regulations, is challenging and less favourable for both consumers and companies because of the patchwork of different approaches. Secondly, a lot of current national regulations would probably not pass the EU’s own rules regarding necessary and proportionate measures in regulation.

Is the STAA pushing back on government claims that the industry is impacting housing shortages?

The reason for such shortages are a lack of building new homes which can be caused by nimbyism on the one hand, where neighbours and local authorities refuse planning permission for sorely-needed new developments, and land banking by development companies on the other hand. However, the number of complaints around the industry and housing are far less common than those around residential amenity. The STAA fully supports existing laws in London and we want to remove any possibility of contributing to a housing situation in the future.

Why is more not made of the fact that the industry increases the overall supply of rooms from a tourism perspective?

A lot is made of this with regard to a tourism perspective. We should champion the increased choice the industry gives to consumers, as well as to areas where hotel infrastructure is not as good as in others.  In certain areas, letting beyond a certain point could potentially have a negative impact on the level of long-term housing available for rent without sensible nightly limits to ensure that it is more favourable for landlords to rent long term if the home is available year round.

Do other members feel a pressure to impose an internal limit, as Airbnb have done?

It has come up in several government meetings, and member companies are all working on their own internal solutions to support the 90-day limits and avoiding rogue landlords renting out year-round. 

What will happen if Labour win the next general election?

They are unlikely to win a national election prior to 2022, as there is unlikely to be one. They may win some key councils in London, such as Westminster, in the upcoming council elections. If they do, we should expect to see a renewed push for licensing schemes and other regulatory proposals.

Many thanks to Airbnb for kindly hosting this event, and to Natasha Mytton-Mills in particular for organising. Thank you also to all of our panellists.

If you are interested in joining the STAA, or if you would like to know more about the work that we do, please contact us at enquiries@ukstaa.org