Birmingham

Guide to Birmingham’s Short-Term Rental Regulations

Birmingham is a great choice for homeowners and rental managers looking for new investments. Britain’s second-largest city attracts millions of visitors every year and property prices are more than affordable. Starting a short-term rental (STR) in Birmingham is relatively straightforward compared with many major cities. However, there are some rules and guidelines you should be aware of. Continue reading to explore all the STR regulations in Birmingham and the surrounding area including taxes, licensing, and property standards. Disclaimer: Our guide is intended for informational purposes only and doesn’t constitute legal advice. For guidance on specific cases, please consult a property lawyer. 

STR regulations in Birmingham

Despite being a large city, Birmingham doesn’t impose many rules or restrictions on STR operators. It has a much more lenient approach than places like London, Berlin, and Rome. Birmingham mostly follows UK law when it comes to renting properties. It defines a short-term let as a residential property you let to guests for a few days or weeks. That could be an apartment, house, or a section of your building. There’s no 90-day rule like in London. You can let properties for up to 140 days in a calendar year whether they’re your home or a secondary residence. Any more than that and you have to apply for planning permission from the local council to run a business. While the rules are relaxed now, the situation will change soon. The UK is launching a nationwide registration scheme in 2024 and monitoring the use of STRS more closely. This new legislation will affect Birmingham and the surrounding metropolitan boroughs.

Selective licensing in Birmingham

In 2023, Birmingham introduced a selective licensing scheme for private landlords in certain areas. The aim is to ensure all properties meet set standards and protect tenants. Anyone letting out properties to guests and tenants must apply for a license if they’re in one of Birmingham’s 25 designated wards. You don’t need to be the owner but you should be responsible for collecting rent and managing the property. The license fee is £700 and lasts up to five years. You may be exempt from the licensing scheme if the property:

• Already has an HMO license
• May change in use within the next few months
• Currently has no occupants

Even if you only occasionally let your property, always double-check whether you need a license. The council may impose fines or take legal action if they discover you’ve accepted guests without the right paperwork. As part of the licensing agreement, your property must meet certain standards. For example, you must have smoke alarms and carbon monoxide detectors. Birmingham also sets an occupancy limit for each property — you’re responsible for making sure you don’t have too many guests or tenants at any point.

AI Party Bans

Birmingham is one of the cities in Europe piloting Airbnb’s new feature. The platform uses AI and natural machine learning to identify bookings that look like unauthorized parties. Airbnb has programmed the AI to look for factors like duration, dates, and number of guests. For example, two days in the center of town for ten guests over New Year’s Eve might trigger an alert. Then the software can automatically block the booking and Airbnb may suspend or even ban the users. So far, Airbnb has blocked over 380 bookings in Birmingham. If you use the site for listings, this feature could help you filter out disruptive guests and avoid issues with the local council.

STR tax requirements for Birmingham

Besides the selective licensing fee, Birmingham doesn’t have any extra tax requirements for STR operators. You only have to pay income tax, capital gains, and VAT like the rest of the UK. You owe council tax if you let your property for less than 140 days in a year. There are different bands across Birmingham and the surrounding area. Check what you’re expected to pay using the UK’s postcode finder. It’s worth noting that Birmingham has recently announced a 21% increase in council tax. Factor this possible extra cost into your budget when looking at properties. Do you let your property for over 140 days a year? You owe business rates even if you live there full-time and only use part of the building for guests. However, you may be eligible for a temporary reduction if you:

• Count as a small business
• Have fluctuating income
• Supply heating or cooling to nearby buildings
• Currently have no occupants
• Experience financial hardship

You may automatically qualify for a reduced rate for being in the hospitality industry or lying within one of Birmingham’s enterprise zones.

Popular places around Birmingham with STR regulations

If you’re unfamiliar with Birmingham, you should know that the metropolitan area encompasses several other cities and towns. In this section, we’ll explore the STR regulations and guidelines for these areas.

Coventry

The historic city of Coventry is just a 30-minute drive from Birmingham. If guests are traveling north, it’s a great pitstop on the way to Leicester and Nottingham. Coventry currently doesn’t have any laws concerning the use of short-term lets. However, they’re considering a selective licensing scheme like Birmingham’s. If they move forward with the initiative, fees will be £380 for five years. One service that property managers may appreciate is the council’s pre-application advice. If you’re seeking planning permission for your STR, they can indicate whether they’ll accept the proposal and any issues you should address. The council warns they can’t make guarantees or consult with neighbors though.

Wolverhampton

Wolverhampton is home to the football team of the same name. That means the city gets a steady flow of both tourists and visiting fans. There’s currently no selective licensing scheme in Wolverhampton. The council only expects private landlords to meet national standards and respond to issues. If they identify any hazards caused by your short-term let, they may serve you with a notice prohibiting people from using some or all of the property.

Sandwell

Just next door to Birmingham you’ll find the district of Sandwell. It’s home to the county park which covers 1700 acres of pristine countryside where guests can go walking, cycling, and bird watching. Sandwell doesn’t have a selective licensing scheme so you just need to ensure your property meets UK standards. Getting planning permission to run an STR in certain parts of Sandwell may be challenging. The town has many conservation areas and places of natural beauty. If the council feels a development or change of use may impact these designated zones, they’ll rule against the proposal.

Dudley

Many tourists come to Dudley to explore the town’s canals and limestone caverns. The town is also a short journey from Birmingham city center by train or car. Dudley doesn’t require private landlords to get a license but does expect them to meet certain standards. They have also implemented a banning order. If a landlord commits a serious offense, they may be prevented from renting for up to 12 months. The council takes a tough stance against antisocial behavior. As the landlord, you’re responsible for preventing guests from causing loud noise or littering the area. Neighbors can report issues with your property and reopen the case if they’re dissatisfied with the result.

Solihull

Solihull may have higher property prices than other areas of Birmingham but property managers won’t struggle to attract guests. The leafy borough has repeatedly topped the lists of the best places to go in the UK. Despite the appeal of the town, Solihull hasn’t introduced selective licensing. Private landlords just need to maintain acceptable standards. Similar to Coventry, Solihull offers pre-application advice for those considering a development or change in use. You can arrange a meeting with a planning officer to discuss your STR and see whether your plans are likely to be accepted. Allow three weeks from the date you send the request to allow the council to respond.

Resources

• GOV.UK, When is permission required?
• GOV.UK, Short-term lets rules to protect communities and keep homes available
• Birmingham, Selective licensing
• News Airbnb, Airbnb using AI to help clamp down on New Year’s Eve parties globally
• Birmingham, Who has to pay business rates?
• Coventry.gov, Property licensing
• Coventry.gov, Pre-application advice for planning, highways, or drainage
• Wolverhampton.gov, Housing Enforcement and Charging Policy
• Sandwell.gov, Do I need planning permission
• Dudley.gov, Are you a landlord? Solihull.gov, Pre-application discussions