1.0
Introduction
1.1
Westminster has two major concerns about any proposal to alter or remove
London’s powers to restrict short-term letting which were granted by the Greater London
Council (General Powers) Acts 1973 and 1983 (which will be referred to collectively as
'the Act' in this response). The first concern is the damage this would cause to
Westminster’s ability to meet housing needs because of the likely loss of permanent
housing stock and the second is the proven negative impacts on residential amenity
caused by short-term letting.
2.0
Loss of Westminster’s housing stock
2.1
There is no valid justification for the removal of the Act. There has been no
diminution in the need for housing for people who live and work in London – need is
much more acute today (with a London population of over 8 million and growing) than it
was when the Act was passed in 1973 (when the population was 7.5 million and
decreasing). There is clearly more of a need, not less, to protect homes for permanent
residential occupation, particularly with an expected increase in London’s population of
between 91,000 and 106,000 people per year in the decade to 2021.
2.2
According to the GLA household projections there will be about 12,700 additional
households in Westminster 2013-25 and to cope with this increase, Westminster’s
annual housing target is expected to increase from 770 to 1068 units (as indicated by
the Draft Further Alterations to the London Plan).
2.3
Westminster has dealt with 7,362 enforcement cases against short-term letting in
the last 15 years (see paragraph 4.3) -this equates to nearly seven years housing
supply (based on the target of 1,068 units per year target). Assuming a similar case
load, this could suggest an average loss of 490 units to short-term letting each year. On
this basis, Westminster would have to deliver an additional 5,890 units to meet likely
housing demand. Put another way our housing target - which is already ambitious and
which we do not currently meet – would have to rise by over a quarter, from 1,068 to
1,559 units per year. These figures are rough but they make the general point – this is
an issue with a real potential to impact significantly on the council’s ability to meet
Government policy (and sound planning practice) to “boost significantly the supply of
housing” and to plan to “meet the full, objectively assessed needs for housing”
(paragraph 47 of the National Planning Policy Framework).
2.4
The Mayor of London recognises the importance of retaining residential units for
permanent use. London Plan Policy 3.14 C states “the loss of housing to short-term
provision (lettings less than 90 days) should be resisted.” This regional policy cites the
1 Act in the supporting text. The issue is a particularly pertinent one given the projected
increases in London's population (2.3 million extra people living in the city by 2036) and
the critical need to ensure London has enough accommodation to meet this growth. We
are aware that for these reasons, the Mayor also strongly opposes repeal of the Act.
2.5
London taken as a whole has more than enough visitor accommodation to satisfy
demand. Locally, Westminster has over 430 hotels suiting a range of budgets, providing
26% of London’s hotel bedrooms. Westminster City Plan policy S23 protects existing
hotels and recognises that hotel use is often not compatible with residential
neighbourhoods because of the amount of activity it generates. Contrary to the
impression given in the discussion document there was no extensive controversy about
the operation of the Act at the time of the 2012 Games, and there is certainly no
evidence of which the Council is aware that there was any shortage of accommodation
then that would justify a step of this kind.
2.6
Westminster is a densely populated inner city area where large development
opportunities are increasingly scarce, meaning housing demand often outstrips supply.
A very desirable central London location and a wide range of attractions and events
makes short-term letting of private homes to holiday makers and visitors to London an
extremely attractive proposition and a particular issue in Westminster. A research report
into rents charged for short-term lets in Westminster in 2008 found that the difference
between private sector and short-term let rents are extreme. In 2005, the average
private sector rent per week for a two-bedroom flat/house/maisonette was roughly £415
and the average for a comparable short-term let property was £1,551 per week - a
difference of 273%. There is no evidence that this gap has closed. This demonstrates
the extremely strong economic incentives which would exist if short-term letting were
not controlled and explains why there are such grave concerns about a loss of
mainstream housing to temporary sleeping accommodation.
2.7
The Planning Inspectorate has recognised the importance of housing numbers in
relation to short-term letting. For example, the Inspector for Case Study 3 (see
paragraph 5.3 below) concluded on assessing the argument that temporary sleeping
accommodation enhances the vitality and viability of an area and the sustainability and
economic benefits that:
“in my opinion some of them also apply to permanent
residential accommodation, such as, the sustainably
location and the enhancement of the vitality and viability
of the area.”
She also considered that the benefits to tourism and economic development of an
increased supply of temporary sleeping accommodation did not:
2 “outweigh the strong policy objection to the loss of
permanent housing stock and the accepted need for
housing.”
The Inspector concluded that:
“the change of use to temporary sleeping
accommodation leads to an unsustainable loss of
permanent residential accommodation.”
2.8
The Act states that if a property is let out for less than 90 consecutive nights, then
a material change of use has taken place for which planning permission is required. The
relevance of the greater use of the internet to arrange short-term letting elsewhere is not
immediately apparent. Even if the internet were to become the primary basis on which
short-term letting bookings are made it should not obviate the need to obtain planning
permission for such use. Furthermore, the use of the internet (internet based letting
agencies for example) advertising properties for short-term lets in Westminster is
unlawful as it is effectively aiding and abetting an unlawful activity. The City Council has
sought Counsel’s advice on this matter and may consider applying to the High Court for
injunctive relief to ensure the relevant companies adhere to the current legislation.
2.9
It is important to comment here that Westminster is not inherently opposed to
lawful short-term visitor accommodation. Eight per cent of Westminster’s visitor
accommodation is in the form of lawful serviced apartments catering for the needs of
those who wish to stay in the city in a more home-like setting. The council believes the
requirement to obtain planning permission for a material change of use from any
unprotected commercial use to short-term letting apartments is a necessary, reasonable
and proportionate requirement. It enables such uses to be considered on their individual
merits having regard to relevant development plan policies (developed and adopted
following extensive consultation with residents, businesses and visitors in accordance
with the ‘localism agenda’ and tested at examination in public) and having regard to the
local character and all other material considerations. It also facilitates consultation with
other local people that may wish to make representations regarding the change of use.
3.0
Negative impact on residential amenity
3.1
A householder without planning permission who rents out their property for a
week or two once a year whilst away on holiday is in breach of the short-term letting
restrictions and that rental has the potential to cause a nuisance to neighbouring
residents and/or businesses. However, the essence of the problem in central London is
not an occasional ad-hoc use for renting but the persistent and ongoing use of
3 residential accommodation for short-term letting. The nature of Westminster’s housing
stock, with nearly 90% being flats, makes short-term letting here even more attractive
than in other boroughs with a higher percentage of houses in their housing stock. Left
unchecked unlawful short-term letting results in whole blocks of flats (typically)
becoming blighted by all-year-round transient hotel-type use by persons treating the
accommodation as a hotel, with all the problems for permanent residents which that
entails.
3.2
This aggressive, industrialised form of short-term letting is prevalent across
Westminster, and is undertaken solely for its very lucrative nature. As well as taking
housing out of the lawful market for permanent residential use substantially
exacerbating the housing supply problems, it also results in a number of unwelcome
consequences for local residents and businesses, such as:
• a transient community less likely to care about the locality in which they are staying,
which undermines permanent residential communities and neighbourhoods and
devalues entire areas;
• disturbance to residential amenity e.g. from noise, often at unsociable hours -a
particular problem in densely-developed areas like Westminster;
• reduced security in established residential blocks;
• a high turnover of occupancy that can be threatening towards longer-term residents
who constantly encounter new faces increasing insecurity as neighbours constantly
change. The Council has evidence of widespread community concern about the
effects of short-term letting on neighbourhood character, quality and cohesion of
constant population “churn”;
• fear of crime. Our experience from taking enforcement action is that short-term
letting can often be linked with Housing Benefit fraud and other areas of criminal
activity (see paragraph 4.6);
• high short-term rental values relative to longer term lets (up to 300% - 500% higher)
making it difficult for people to live and work within the Borough and displacing
longer term letters;
• competition for legitimate hotels forcing room rates to be pushed up, making
Westminster a less affordable place to visit and stay;
• nuisance to local businesses which were previously directly adjacent to residential
properties.
4.0
Westminster’s approach
4.1
Westminster's Unitary Development Plan Policy H 2 prevents the use of housing
by non-permanent residents. The policy states:
“Planning permission will not be granted for the use of housing as temporary sleeping
accommodation. The Council will attach a condition to grants of planning permission for
4 new or converted housing to prevent the use of housing for this purpose. It will use its
powers to take enforcement action against such unauthorised uses.”
4.2
The Council relies heavily upon the Act in enforcing against breaches of Policy
H 2 and for a number of years the council has had a dedicated team of Planning
Officers dealing with this breach of planning control. The team receive daily complaints
from residents and resident associations regarding the impact short-term letting is
having on their amenity. It has proved to be such an issue in particular parts of the
Borough that Councillors in Hyde Park, Bryanston & Dorset Square and Lancaster Gate
wards have committed funding from Ward Budgets which they have powers to allocate
under the Council’s constitution to increase resourcing to deal with this unlawful use.
4.3
In the last 15 years, the Planning Enforcement Team has investigated 7,362
properties allegedly used unlawfully for short-term let accommodation. During this
period, the Team have closed and/or resolved 6,707 of these investigations, with the
majority of these properties reverting to lawful permanent residential use. In total, it has
been considered expedient and necessary to serve 367 enforcement notices during this
15 year period of which 151 of the notices served have been the subject of
unsuccessful appeals. The Planning Enforcement Team is currently investigating 1,450
properties allegedly being used unlawfully for short-term let accommodation. In the past
12 months they have issued 51 Enforcement Notices requiring cessation of the use of
these properties for short-term let use.
4.4
The Planning Inspectorate (Secretary of State for the Department of
Communities and Local Government) recognise the impact short-term letting has in
Westminster not only on the Council’s ability to meet housing need given the pressures
of a rising population, but also the harm to the local area’s character and residential
amenity. Each and every appeal submitted against the Enforcement Notices the Team
has issued has been dismissed by the appointed Planning Inspector - supporting the
Council’s (and Mayor's) planning policies.
4.5
The Enforcement Team has also undertaken 12 ‘pro-active drives’ with the
Housing Benefit Fraud Team and Metropolitan Police over the last two years as the
illegal short-term letting of private sector homes where tenants claim Housing Benefit is
an acute problem within Westminster (it constitutes offences under Fraud, Theft, Social
Security & Proceeds of Crime Acts).
4.6
Housing Benefit claimants are attracted to the significant profits that can be made
by letting out their claim addresses on a short-term whilst the tax-payer pays their own
rent, effectively allowing them to double their income unlawfully. The 12 ‘drives’ have
stopped Housing Benefit claims to a value of £1.6 million to date. Of the sub-let claim
addresses well in excess of 90% are sub-let to short-let visitors. The removal of
5 planning control on the leaseholders / agents that let these properties would remove the
last non-criminal control on the problem and with no fear of civil enforcement is likely
lead to a surge in fraudulent sub-letting Housing Benefit claims at very significant cost to
the tax-payer. This would be both in terms of the increased benefit bill but also the
increased cost of the criminal investigation by the council and police which has a much
higher burden of proof than civil enforcement and is therefore significantly more
expensive on a case by case basis.
5.0
Case studies in Westminster
5.1
Below are three recent case studies to illustrate the continued support from the
Secretary of State for Communities and Local Government for the City Council’s actions
in preventing short-term letting.
5.2
Case Studies 1 & 2: Flat 338 The Water Gardens, W2; and Flat 9 The Water
Gardens, W2.
The City Council took action to stop the continued and persistent use of the flats for
short-term letting and the owners of the flats appealed to the Secretary of State for
Communities and Local Government. The Inspector appointed to determine the appeals
dismissed them both in July 2013. A large number of local residents, amenity societies
and Westminster Councillors took the time and trouble to submit reasoned and detailed
objections to the appellants’ commercial use of residential accommodation. (See an
example in Appendix 1. Some names have been redacted to protect confidentiality but
no representations were submitted to the Secretary of State anonymously). These
objections illustrate concerns inherent in unauthorised short-term letting as set out in
paragraph 3.2 above, including anti-social behaviour, adverse impact on residents’
security, noise-nuisance to residents (in particular to the elderly), nuisance from
inappropriate disposal of rubbish and food waste, overcrowding and an absence of civic
responsibility and neighbourliness. These representations exemplify the desire of
residents to live in stable communities where people respect and care for their
neighbours and local environment.
5.3
Case Study 3: 20 Porchester Place, London W2 (Flats 1, 3, 4, 7, 9 & 10)
Of the 10 flats in this block several had been used for short-term letting by a company
whose business was effectively competing with local hotels or apartment-hotels. The
City Council took action to stop the use and the appeal was decided by way of a Public
Inquiry. The QC for the appellant made the unsuccessful argument that the Council’s
actions were ‘unfriendly’ to business. They also argued that the use had become lawful
by the passage of time and that planning permission ought to be granted on the basis
6 that short-term letting plays a vital role in London’s economy. The appointed Planning
Inspector gave these arguments very careful consideration but came to the view this
approach had to be rejected. The Inspector noted the importance of London as a place
to live (as well as to visit as a tourist) and found that the protection of London’s
permanent housing stock had overriding weight (see Appendix 2). This is a view every
other appeal Inspector has come to over the years in such cases, without a single
exception.
6.0
Case studies around the world
6.1
Other cities around the world operate a permit/licensed system for homeowners
wishing to enter into the short-term lets market. In Chicago, Austin (Texas) and Dubai
permits must be paid for by homeowners wishing to let out their property on a short term
basis. Austin also requires no more than 3% of properties in any one ward to have a
licence for commercial short-term letting. New York and Paris offer similar schemes but
licence fees and rental-term restrictions depend on whether the host (homeowner) is
present for the duration of the rental period. Rules are more flexible in Amsterdam, with
no licence required to let a property out on a short-term basis, but a number of
‘commonsense rules’ which are expected to be adhered to.
6.2
To run a license-based system similar to the cities mentioned in paragraph 6.1
would create an unnecessary and costly regulatory burden for Westminster as the
council would have to monitor or manage some or all of the following to ensure the
system was effective:
•
•
•
•
•
•
•
whether the host is or isn’t present for the duration of the short-term let;
how often and for how long the property is let out;
if the property remains to be the host’s primary residence;
a database of all properties licensed for short-term letting;
property inspections;
health and safety property inspections;
percentage levels of short-term letting within any one ward.
6.3
The Act is far clearer for all concerned than the permit systems which have
provisions about the lengths of lets, ‘occupiers’ being present etc. Homeowners in
Greater London should be clear about the requirements – the Act fulfils this and is
unambiguous.
6.4
With an ever decreasing council budget, it makes little sense to introduce a
costly, complex and burdensome regulatory solution to a problem which does not exist 7 there is no evidence of a shortfall in visitor accommodation in Westminster. Replacing
the Act with new rules, regulations and policies which would be necessary to run a
legitimate short-term letting system flies in the face of the ‘red tape challenge’.
6.5
Although in theory the cost of the license would cover the administration costs of
running the system, a licence would not mitigate the problems associated with this type
of visitor accommodation (listed in paragraph 3.2). Additionally non-compliance with
licensing requirements/restrictions is a risk (as Chicago has found) and without
legislation (such as the Act) to rely upon, enforcement against homeowners who let their
properties out on a short-term without a licence will be difficult. This is likely to result in a
more costly service to run, and high dissatisfaction among residents whom have already
indicated through the daily complaints the Planning Enforcement Team receive about
illegal short-term letting that they do not want the function and character of their
residential areas changed by short-term letting.
7.0
Conclusion
7.1
As explained above, the problems caused by short-term letting are a significant
issue, for Central London and Westminster in particular, due to the intense demand for
new housing to accommodate a fast-growing population and an already densely
populated city where neighbours activities are more noticeable. Without the provisions
contained within the Act, the council will be at a distinct disadvantage when enforcing
against breaches of Policy H 2. It will become even harder to meet housing demand in
the city and the unwelcome consequences associated with this activity will be allowed to
continue without remedy.
7.2
Whilst the problems associated with short-term letting are particularly apparent in
Central London, we are aware that they are also an issue in other parts of the UK for
the very same reasons. Westminster City Council has been contacted by numerous
authorities across the UK on a number of occasions (including but not limited to
Birmingham, Brighton and Hove, Glasgow, Edinburgh, Leeds and Bristol) to enquire
how it is that we enforce against short-term letting as it is a particular problem in their
areas too.
7.3
Westminster is clear that the Act continues to serve a useful purpose. It therefore
urges the government very strongly not to remove or weaken the legislation.
7.4
The short-term let legislation is not ‘red tape’ or bureaucratic interference in the
market but a clear and effective tool of proven value in tackling issues of genuine
concern and importance, in building stable communities and community cohesion.
8 7.5
Any attempt to ‘simplify’ short term letting in London (such as through the
mechanisms in other cities listed in paragraph 6.1) will create uncertainty for
homeowners about what is and isn’t allowed, is likely to have unintended consequences
and, to result in the need for more bureaucratic interference to manage them – not less.
9 APPENDIX 1 – Examples of objections to proposal at Flat 338 The Water Gardens,
W2; and Flat 9 The Water Gardens, W2.
APPENDIX 2 – Inspector’s decision regarding 20 Porchester Place, London W2
(Flats 1, 3, 4, 7, 9 & 10)
10