Westminster Council, located at the heart of London, has again voiced its concerns about the surge in short-term lets. According to recent reports, from January to July of this year, an astonishing 11,800 properties were listed on Airbnb within this borough alone. This figure makes Westminster the top borough in London in terms of Airbnb listings.

For some perspective, a single block in Westminster was found to offer nearly as many rooms per night as the renowned Ritz hotel – 98 rooms in comparison to the Ritz’s 111. However, here’s the twist: this particular building contributed a mere £92,000 in council tax. In stark contrast, the Ritz contributed a hefty £2.27 million. The disparity is staggering and a cause for concern for both the council and traditional hospitality businesses.

“An Enforcement Nightmare”

Westminster’s Council leader, Adam Hug, communicated the frustration and challenges the council faces in an interview with the Caterer magazine. He pointed out the disparities between traditional hospitality businesses and the burgeoning short-term let industry. The crux of the matter is that while established businesses pay business rates, corporation tax, and adhere to regulations, many short-term lets exploit small business exemptions.

But the financial aspect isn’t the only issue at hand. Local residents, who once enjoyed the peace of their homes, now frequently find themselves amidst noisy parties and disruptions. One resident lamented about repeated disturbances from an upstairs property used for parties, saying, “It is not the first time; they make any sleep impossible.” The question arises: Should these long-term residents bear the brunt of these disturbances and even foot the bill for the aftermath through their council tax?

Proposed Solutions: Registration and Levies

In an attempt to find a middle ground and address the prevailing issues, Mr. Hug proposed a couple of solutions. First, he suggests the introduction of a compulsory registration scheme for all short-term let properties. This would provide greater oversight and control for the council.

In addition to the registration, he hinted at the possibility of introducing a tax on overnight stays – applicable to both short lets and traditional hotels. Such a levy is not unique and exists in several major cities worldwide. The revenue generated from this tax could be channelled into essential services, from maintaining the cleanliness of streets to enhancing public safety.

Moreover, considering the appeal of major events like the King’s Coronation that brought millions to Westminster, such levies, if implemented, could play a significant role in sustaining and improving the borough’s infrastructure.

In a broader stroke, Westminster Council has voiced its preference to revert to the pre-2015 regulations. During those times, letting out entire residential homes for short periods required explicit planning permission. The council also held the power to restrict short-term lets in certain parts of the city. It’s worth noting that a government consultation about the potential introduction of a registration scheme for short-term lets across England closed for submissions in June this year.

Conclusion: A Changing Landscape for Property Investors

For those invested in or considering entering the UK’s property market, particularly in London, it’s essential to stay abreast of these developments. As cities grapple with the challenges posed by short-term lets, regulations are bound to evolve. Ensuring compliance and adapting strategies in line with changing dynamics will be crucial for sustainable success in the property investment sector.