Tuesday, 25 February 2014

Short-term lets in Greater London


Planning professionals whose practice includes dealing with residential property in Greater London will be aware of section 25 of the Greater London Council (General Powers) Act 1973 (as amended), which provides that for the purposes of what is now section 55(1) of the 1990 Act, the use as temporary sleeping accommodation of any residential premises in Greater London involves a material change of use of the premises and of each part of them that is used for that purpose. 'Use as temporary sleeping accommodation’ means use as sleeping accommodation which is occupied by the same person for less than 90 consecutive nights and which is provided (with or without other services) either for payment or by reason of the employment of the occupant.

The provision applies whether or not the relationship of landlord and tenant is created by this arrangement. So if used in this way, a residential property is no longer a single private dwelling within Use Class C3, but is a sui generis use. This has two consequences. First, it cannot be claimed in this case that the property should still be treated for planning purposes as a single dwelling, because the 1973 Act takes it out of that category. Secondly, it follows that a breach of planning control comprising this change of use is subject to the 10-year rule, rather than the 4-year rule.

The operation of this legislation was reviewed by the Court of Appeal in Fairstate Limited v. FSS [2005] EWCA Civ 283. The question at issue in this case (as Ward LJ put it in his judgment) was “what if any breach of planning control occurs where the use to which a London flat was put changed over three stages – (1) for more than ten years as temporary sleeping accommodation which made that unauthorised use lawful, but (2) with a change for about five months to longer-term residential occupation, and finally (3) reverting back for the next four years to temporary sleeping accommodation.”

It was common ground between the parties in that case that, at stage (1), use of the flat for temporary sleeping accommodation was a material change of use that had become a lawful use by virtue of section 191(2) of the 1990 Act. Nevertheless, it was held by the Court of Appeal that the change from stage (2) to stage (3) (from permanent back to temporary sleeping accommodation) was a further breach of planning control in respect of which enforcement action could be taken.

Now, according to a report in yesterday’s Evening Standard, ministers are proposing to scrap this provision, so as to allow short-term lets in Greater London (for example “for a few days while the owners go on holiday”). The demand for short-term accommodation during the 2012 Olympics has been cited as the sort of thing that ministers think ought to be catered for. The suggestion is being canvassed by Kris Hopkins, the recently appointed junior minister in De-CLoG who is responsible for housing.

The whole point of this 1973 legislation was to protect much-needed housing accommodation for permanent residents in the capital, and we are all well aware of the huge unmet demand for such accommodation. If a significant proportion of the available housing stock were to be used for holiday accommodation or other short-term lets, which may well prove more lucrative to property owners, this will only exacerbate an already dire shortage of suitable accommodation for workers in London.

No firm proposals have yet been put forward, and it remains to be seen if the government will press ahead with this idea. What do Mayor Bojo and his advisers think about it? I am sure that Shelter and others concerned with housing provision will have plenty to say on the subject. If the government does want to relax the rules in Greater London to some extent, the new rules would no doubt have to be carefully framed to avoid the loss of permanent residential accommodation in the capital. The limited type of temporary letting that Kris Hopkins was talking about might be an acceptable concession, but anything that would result in the permanent loss of residential accommodation should be avoided.

Offhand, I don’t know whether this was simply a kite-flying exercise on the part of Kris Hopkins, or the beginning of a consultation exercise, but if you own residential property in Greater London, don’t get too excited about these ideas for the time being – it may take some time before any definite proposals are formulated, if indeed the idea goes forward at all.

© MARTIN H GOODALL

1 comment:

Anonymous said...

It sounds like an issue that the Housing Committee of the London Assembly should do an investigation and report on, given the huge undersupply of a and rising unaffordability of housing in the capital.

I suspect though that this proposal has more to do with it being virtually unenforceable (thus counting as the dreaded 'red tape'), than envisaging or promoting an increase in the use of homes as temporary sleeping accommodation.

As it stands there are many web based agencies facilitating this, seemingly just for Wimbledon or the run up to Christmas, suggesting it is not worthwhile as a year round venture. It seems to me that there is a healthy supply of hotel rooms, healthy competition on price; and most tourists would want to stay in different areas to where homes are located (as evidenced by the locations of hotels built recently or in the pipeline - the vast majority being within Southwark, Tower Hamlets, the City, Westminster, Lambeth and K&C - and Hillingdon and Hounslow for Heathrow).