Planning rules surrounding holiday lets set to change

As the government looks to bring in new rules to protect rural and coastal communities, those renting property out as holiday lets are being warned not to be caught out by changes to the planning system. 

From this summer, there will be a new planning use class for dwellings that are: 

• Used for short term lets (let for more than 90 nights a year) 
• And not used as a sole or main home 

(Note: Existing dedicated short-term lets will automatically be re-classified into the new use class and will not require a planning application.)

A new mandatory national register will also be created to provide local authorities with information on the short-terms lets in their area. 

This new use class is to be accompanied by two new permitted development rights: 

• for a property to be changed from a short term let to a standard residential dwelling  
• for a property to be changed to a short term let.  

Carter Jonas Associate Partner Nicola Quick believes the new rules could potentially catch homeowners out if they’re not prepared. 

“At the moment, a lot of homeowners flip between their house being a residence and a holiday let,” she explains.  

“Particularly during the covid lockdowns, a lot of people would move out of their homes for the summer and rent them out through Airbnb because demand was so high.” 

The government indicates that homeowners will still be able to let their main or sole home for up to 90 nights every year without a change of use and adds that it is considering how to apply the register so it doesn’t apply disproportionate regulation on those who let their homes out infrequently. 

However, anyone renting their property out for more than 90 days will need to apply to change the use of that house from residential to holiday let. 

“The part that may catch people out is that this summer when the rules are put into force (and we don’t yet have a date) it will be an automatic change – if your residential property is being used as a holiday let at that point, it will automatically be reclassified as such,” Nicola explains.  

“Most don’t realise this is the case, but hopefully there is enough time between now and the summer for people to prepare, subject to the date in the rules not being historic, and understand any tax implications.” 

There is a concern that these changes to the planning system could have a negative impact on the value of some properties. 

“It could impact capital values because if a homeowner puts a property on the market that flips between being residential and a holiday let, they have access to both markets – someone could buy it as a forever home, or as an investment,” Nicola adds. “This change will restrict sellers without the need of making an application and potentially impact values because they may be limited to one option.” 

At this stage, this is all the detail that we have available. As the new rules are due to be implemented in the summer, we will continue to provide the most up to date information. Contact us directly if you wish to discuss these changes further and for guidance on short term lets.