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London’s Mayor Seeks to Curb Short-Term Lets With Licensing Scheme

London’s mayor, Sadiq Khan, has implored the UK government to collaborate with him and local borough councils to implement a licensing scheme for short-term rentals. The proposed regulation is geared towards granting local councils the power to limit the number of licenses issued in their jurisdictions to prevent the monopoly of residential streets or blocks by short-term rentals.

Earlier in the year, reports surfaced of a residential block in Westminster where a staggering 90% of its 118 units were listed on short-term letting platforms. In a startling revelation, as of July 2023, Airbnb had 81,792 listed properties in London, with 50,401 being entire properties. This translates to a ratio of at least one in every seventy-four homes in London being listed for short-term rental.

Khan argued, “In our fight against the housing crisis in London, we are doing our utmost to build an unprecedented number of affordable, high-quality homes that Londoners deserve. However, our efforts are thwarted by the unregulated short-term letting market.”

He added, “While short-term lets play a significant role in London’s tourism sector, this should not jeopardize the housing needs of Londoners. We need to bring clarity to the number of properties that are being rented out beyond the stipulated rules and ensure accountability to local authorities and residents.”

Khan further insisted that it’s crucial for the government to join forces with him and borough councils to create a licencing system that would bring some regulation to this fast-growing sector and prevent further losses of London homes to short-term lets.

Current rules permit homeowners to rent out their homes for up to 90 days a year. However, there are speculations that numerous property owners in London could be violating this rule. The issue is further complicated by the fact that boroughs lack the necessary resources to monitor compliance effectively.

The introduction of licensing fees and business rates enforcement for properties let out for more than 90 days a year would provide financial support to councils. Many of these councils have suffered repeated budget cuts in recent years, affecting their ability to enforce rules against unregistered landlords effectively.

The challenge of short-term lets eating into cities’ housing supply is not peculiar to London alone. In response, Khan has looked to the examples of other global cities such as Barcelona, Amsterdam, and Paris. These cities have all implemented some form of licensing scheme, with the French government even compelling short-term letting platforms like Airbnb to publicly disclose listing data.


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