London

Guide to London’s Short-Term Rental Regulations

Thanks to its year-round demand, London is a great investment opportunity for vacation rental managers. You also have your pick of the 32 boroughs with their distinct appeal and benefits. Before you take the first step, familiarize yourself with London’s short-term rental regulations. Compliance is key to business success. If you unwittingly violate one of the strict laws, you could face fines, legal action, and ultimately loss of rights. In our guide, we unpack all the most important legislature including eligibility criteria, tax requirements, and operational guidelines. 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. 

Short-term rental regulations in London

The London government defines a short-term rental as a residential property you let for less than 90 nights. This definition includes both homeowners and property management businesses. As there’s high demand for both housing and temporary accommodation, London regulates short-term rentals. You don’t currently need a permit but there are strict rules about who can set up a business and where. The main law is that you need to obtain planning permission unless you meet the following conditions:

1. The property only accepts guests for up to 90 days in a calendar year.
2. At least one of the accommodation providers pays council tax.

London officials introduced the law to allow residents to make extra income from their homes while they’re away. The conditions are there to prevent companies from setting up without permission and using up the housing supply. You’ll receive a £20,000 fine if you exceed the 90-day limit. Listing sites may work alongside London officials to uphold the law. For example, Airbnb removes your listing once you hit 90 days. If you need to request planning permission, contact the local council for your borough. Use the UK government’s postcode finder to find yours.

Tax requirements for short-term rentals in London

Property operators in London are subject to income tax, capital gains tax, and VAT like every other business in the UK. You’re also required to pay council tax if you use your primary residence as a short-term rental. If you’re sub-letting to guests, the responsibility falls to you — not the owner. London doesn’t have a single set of council tax bands, unlike many other places in the UK. The city lets local councils decide and set rates. Fortunately, you can look up your council tax band for wherever you live by using the UK’s centralized system.

Popular London boroughs with short-term rental regulations

Some boroughs in London have their own short-term rental regulations. In this section, we explore the laws and guidelines of some of the most popular areas.

The City of London

Many tourists won’t settle for anything less than the heart of London where they can find all the most popular sights. However, the local council won’t give planning permission for short-term rentals unless they fit the Local Plan. This is a comprehensive strategy for land usage in the area including residential, commercial, and retail properties. Planning officers can tell you whether your application for planning permission is likely to be successful. You need to contact the Environment Department to speak with someone.

The City of Westminster

Home to many iconic landmarks, the City of Westminster draws in thousands of tourists. There’s a constant demand for properties around Victoria and Pimlico where you’re within walking distance of Buckingham Palace. The borough also has some of the lowest council tax rates in London, despite being so central. Westminister City Council welcomes short-term rentals but knows how disruptive short-term rentals can be. They’ve made the host (whether that’s the owner or renter) responsible for ensuring guests keep noise levels down and treat the neighborhood with respect.

Camden

Known for its eclectic mix of culture and history, Camden is popular with tourists. There’s a strong demand for short-term rentals so visitors can enjoy the local markets, music venues, and festivals. Camden Council says they will likely refuse applications to convert permanent housing into short-term accommodation. This means it’s a better option for residents who want to take advantage of the 90-day than new investors. As planning permission is tied to the property, you could also take over lodgings from someone in Camden without an issue.

Tower Hamlets

The scenic borough of Tower Hamlets is a popular place for tourists. Like Camden, it’s best for residents who want to take guests now and then. Council officials say they’re unlikely to approve new short-term rental businesses due to the ongoing housing crisis. Tower Hamlets is vigilant about preventing residents from breaking the 90-day rule. The council says they’ll use enforcement notices to end the unlawful use of the property. That means any guests you have staying have to leave immediately.

Richmond

Richmond is one of the most lucrative places for investments. A surge in demand for both short and long-term accommodation means there’s a lot of growth potential. As the borough is primarily residential, Richmond Council is concerned with keeping disturbance to a minimum. The government website has a list of guidelines for both residents and visitors to follow about noise and nuisances. Here are the main ones that could apply to guests:

• Loud parties: Parties are permitted but excessive noise could lead to £5000 in fines, criminal action, and confiscation of equipment.
• Pets: Guests shouldn’t allow their dogs to bark loudly and for long periods.
• Bonfires: Neighbors must receive advanced warning about any bonfires. Your guests should set up as far away as possible from any trees, fences, or other buildings.

Richmond encourages residents to talk to their neighbors before making an official complaint about disturbances. Offer everyone on the street your contact details so they come to you first instead of the council or the police.

The Royal Borough of Kensington and Chelsea (RBKC)

Although RBKC may be the smallest borough, it’s one of the most popular among international visitors. It’s only second to Westminster in the UK. RBKC expects you to handle any anti-social behavior from guests staying at your property. If they believe you’re permitting these activities, they may issue you with a Community Protection Notice (CPN). Then you’ll be required to take action or face a fine of up to £2500. As the property manager, the CPN applies to you. That means if guests vandalize the neighborhood, you’re the one who has to pay for the damages and clean up the mess.

Hackney

Hackney is one of London’s most popular places for short-term rentals. It’s conveniently close to the city center and boasts a thriving cultural and social scene. The local council has recently called for licensing in response to the increasing number of rentals. However, it’s not necessarily bad news for property managers. Officials state they want to under and monitor the properties, not restrict them altogether. As an inner city borough, Hackney is concerned with noise pollution. The council has a list of activities they’ll send out enforcement officers to deal with. Note that residents and visitors don’t necessarily have to be loud — the council also responds to quieter, one-off disturbances at antisocial times of the day.

Resources

• London Assembly, Short term and holiday lets in London
• Airbnb Help, I rent out my home in London. What short-term rental laws apply?
• City of London, Short-term letting
• Westminster, Short-term lets
• Camden, Short term lettings and planning permission
• Tower Hamlets, Short-term lets
• Richmond, Noise and nuisance
• Office of National Statistics, Short-term lets through online collaborative economy platforms, UK: Quarter 3 (July to Sept) 2023
• RBKC, Planning enforcement
• Hackney, Our #BetterDealForRenters campaign
• Hackney, Report noise