London Mayor Sadiq Khan has made a passionate plea to the UK government to work together with him and local borough councils in order to establish a licensing scheme aimed at regulating the burgeoning short-term rentals market. The proposed regulations would empower local councils to limit the number of licenses issued within their jurisdictions, thus preventing the monopoly of residential streets and blocks by short-term rentals.

This call comes in the wake of troubling reports earlier this year, which revealed that a staggering 90% of the 118 units in a residential block in Westminster were listed on various short-term letting platforms. Adding to the gravity of the situation, as of July 2023, Airbnb alone had a whopping 81,792 properties listed in London, with 50,401 of them being entire properties. This equates to at least one in every seventy-four homes in the city being earmarked for short-term rental purposes.

Speaking on the urgency of the matter, Mayor Khan stated, “In our relentless fight against London’s housing crisis, we are tirelessly working to build an unprecedented number of affordable, high-quality homes that our fellow Londoners deserve. However, our efforts are constantly undermined by the unregulated short-term letting market.”

“While acknowledging the significant role that short-term lets play in London’s thriving tourism sector, we must not allow it to jeopardize the housing needs of our residents. It is imperative that we bring clarity to the number of properties being rented out beyond the stipulated rules and ensure accountability to local authorities and residents,” Khan added.

The Mayor emphasized that collaboration between the government, himself, and borough councils is essential to devise a licensing system that would bring much-needed regulation to this rapidly growing sector and curb further losses of London homes to short-term lets.

Currently, existing rules permit homeowners to rent out their properties for up to 90 days a year. However, there are growing speculations that a considerable number of property owners in London could be flouting this rule. The issue is further compounded by the lack of adequate resources in boroughs to effectively monitor compliance.

By introducing licensing fees and enforcing business rates for properties let out for more than 90 days a year, the councils would receive financial support. Many of these local authorities have endured repeated budget cuts in recent years, impacting their ability to enforce rules against unregistered landlords effectively.

London’s struggle with the impact of short-term lets on its housing supply is not unique. In response to this global issue, Mayor Khan has sought inspiration from other cities like Barcelona, Amsterdam, and Paris, all of which have successfully implemented some form of licensing scheme. In a notable move, the French government even compelled short-term letting platforms like Airbnb to publicly disclose listing data.