What Are the Rules for Short‑Term Rentals?

Short‑term rentals – often advertised on platforms such as Airbnb, Booking.com or Vrbo – are properties let for brief periods, typically for holiday, leisure or travel purposes. In England and Wales, legal obligations governing these rentals are evolving and can vary significantly by locality. This article explains the current rules, obligations and practical steps hosts should understand before offering short‑term accommodation. It covers planning permission, safety requirements, taxation, local restrictions and future regulatory changes that may affect owners, landlords and property managers.

What Is a Short‑Term Rental?

A short‑term rental is typically a residential property or part of a property let for a short period, often defined as less than 90 nights in a year or for brief stays by guests. These arrangements are sometimes called holiday lets, vacation rentals or short‑let accommodation. The precise meaning and applicable rules can depend on planning law, local authority policies and national legal developments.

Planning Permission and Change of Use

General Rule (Rest of England and Wales)

Outside London, there is no specific national limit on the number of nights a property can be let short term under existing planning law. However, landlords must be mindful of local planning controls:

• Local planning authorities may have Article 4 directions or other policies that mean any change from traditional residential use to regular short‑term letting requires planning permission.
• A change of use can be treated as a material change of use under the Town and Country Planning (Use Classes) regime. This means planning permission may be required where short‑term letting is regular and systematic rather than incidental or occasional.

London: The 90‑Night Rule

In Greater London, specific legislation applies under the Greater London Council (General Powers) Act 1973, as amended by the Deregulation Act 2015:

• A property can be used as short‑term accommodation without planning permission for up to 90 nights in a calendar year.
• To benefit from this exemption, at least one of the hosts must be liable for council tax on the property.
• If the property is let for more than 90 nights in a year without planning permission, this is considered a change of use and planning permission must be obtained from the local council.
• Operating beyond the limit without permission may expose hosts to enforcement action, including notices requiring the use to stop and potential fines.

In some boroughs within London, local authorities have implemented Article 4 directions that remove permitted development rights for short‑term lets altogether. In these areas, planning permission can be required regardless of the number of nights the property is let.

Upcoming and Proposed Regulatory Changes (England)

The legal framework for short‑term lets in England is changing. Recent legislation and government proposals include:

• A new national registration scheme under the Levelling Up and Regeneration Act 2023, requiring short‑term let properties to be registered and assigned a unique registration number. Platforms such as Airbnb will need to display this number on listings.
• Property hosts will likely need to demonstrate compliance with safety standards (e.g. fire, gas, insurance) as part of registration.
• Local planning authorities may use permitted development rights and the proposed “C5 Short‑Term Let” use class to better manage short‑term letting at a local level.
• Councils may have additional powers to manage and restrict short‑term lets where housing supply or community impact is a concern.
• Penalties for operating without registration are expected to include civil penalties (e.g. fines) once the scheme is implemented.

Wales is also advancing its regulatory framework. A statutory licensing or registration scheme for visitor accommodation, including short‑term lets, is in development, and local authorities can raise a tourism levy. At present, there is no existing general power to restrict short‑term letting activity in Wales via planning law alone, but this may change as new schemes are enacted.

Safety and Property Standards

Regardless of planning status, hosts offering short‑term lets must ensure the property is safe for guests. Common requirements include:

• Fire safety measures: risk assessment, working smoke alarms and carbon monoxide detectors, safe escape routes, and fire‑fighting equipment where appropriate.
• Gas and electrical safety:
  • A Gas Safety Certificate (CP12) is recommended annually if gas appliances are present.
  • An Electrical Installation Condition Report (EICR) every five years is recommended.
  • Portable appliance testing (PAT) may be appropriate in multi‑unit properties.
• Legionella risk assessment and appropriate preventative measures.
• Suitable insurance cover for short‑term letting, including public liability insurance for guest injuries and loss cover for property and contents.
  Failing to meet basic safety standards can result in enforcement by local authorities or refusal of registrations/licences under emerging schemes.

Council Tax, Business Rates and HMRC Obligations

Tax Considerations

Income received from short‑term letting is taxable and must be declared to HM Revenue & Customs (HMRC). Hosts should include this income on their self‑assessment tax return.

Council Tax vs. Business Rates

• Where a property is let on a short‑term basis and is not the host's primary residence, business rates may apply instead of council tax if certain conditions are met (e.g. available for letting for a significant number of days per year).
• Hosts who let part of their main home occasionally may qualify for Rent‑a‑Room relief, reducing the taxable income threshold.
  Decisions on whether council tax or business rates apply may vary by local authority and the pattern of letting.

Leasehold, Mortgage and Insurance Considerations

Owners leasing property, tenants subletting, or those with a mortgage must check:

• Lease terms and freeholder consent, as many leases prohibit business use or short‑term letting without permission.
• Mortgage conditions, which may restrict letting types or require lender approval.
• Insurance policies, which may not cover short‑term letting activity unless specifically arranged.

Failure to obtain necessary consents can put leases and mortgages at risk and could lead to enforcement by landlord or lender.

Penalties and Enforcement

Failing to comply with planning, registration or safety requirements can lead to:

• Planning enforcement notices requiring cessation of unauthorised use.
• Fines and civil penalties from local authorities.
• Refusal of registration/licences under emerging schemes.
• Potential impact on future property sale or financing where enforcement notices are registered against a property.

Key Takeaways

Short‑term rentals in England and Wales are legal but subject to a range of rules and ongoing reform. Key points include:

• In London, properties can be let short term for up to 90 nights per calendar year without planning permission. Beyond that, planning approval is generally required.
• Elsewhere in England and in Wales, there is no current national night cap, but local planning rules can require planning permission for regular short‑term letting.
• A national registration scheme for short‑term lets in England is being introduced, requiring properties to be registered and compliant with safety standards.
• Safety, tax and local authority obligations must be met to operate lawfully and protect guests and communities.
  Prospective hosts should check with their local council and professional advisers before listing a property and remain alert to evolving national and local regulations.

James William Steven Parker

James is the founder of UKLegalGuides.com and a former agent at the Ministry of Justice (UK). With a background in processing legal claims, he launched this platform to make the laws of England and Wales accessible to everyone.