A new use class for short-term lettings?

The government is currently consulting on the introduction of a new use class for short-term lettings. It is proposed that changes between the new use class (C5) and dwellinghouses (C3) would be permitted development, so planning permission would not be required.

Why is a new use class being considered?

Currently, use class C3 makes no distinction between whether a dwellinghouse is used as a sole or main residence, or is rented out on a short or long-term basis. If a property were to be let out permanently as a guest house, it would be in class C1. However, just letting your home out on a short-term basis, from time to time, would not be a material change of use so would not require planning permission.

Concerns have been raised about the impact of short-term lettings on communities – there is evidence that a high incidence of such accommodation in an area makes it difficult for local people to buy homes, and adversely affects the viability of local services, such as schools.

In London, where council tax is paid, a property can be let out for up to 90 nights in a calendar year. If a property is let out for more than 90 nights, planning permission is already required. It is not proposed that this be changed.

Does the property fit within the definition of a C5 short-term let?

If and when the new use class is introduced, a property will automatically fit within that use class if it satisfies the definition. The consultation proposes that this should be “Use of a dwellinghouse that is not a sole or main residence for temporary sleeping accommodation for the purpose of holiday, leisure, recreation, business or other travel.”

Will changes between C3 and C5 be allowed without planning permission?

The consultation suggests that permitted development rights should be introduced to allow:

• A change of use from a C3 dwellinghouse to a C5 short-term let; and
• A change of use from a C5 short-term let to a C3 dwellinghouse.

However, local authorities could remove these permitted development rights by making an Article 4 direction in the usual way. It is likely that local authorities would only be seeking to remove the right to move from a C3 dwellinghouse to a C5 short-term let, and not vice versa.

What if a homeowner wants to let out their home for a couple of weeks each year?

If the permitted development right to allow change of use from C3 to C5 is not introduced, or a local authority has put in place an Article 4 direction, the consultation suggests that homeowners should not be precluded from letting their homes for very limited time periods. The consultation seeks views on whether, if this right is introduced, the limit should be 30, 60 or 90 nights in a calendar year.

How will local authorities monitor whether a property is being used as C3 or C5?

It is proposed that there be a register of short-term lets, which will help local authorities to monitor which properties are being let out. A consultation on the registration scheme for short-term lets was released alongside this one.

Local authorities will need to keep abreast of developments so that they can consider whether or not they need to make an Article 4 direction, and also to put in place procedures to ensure compliance with the registration scheme.

TLT has extensive experience in advising on planning matters. If you would like to discuss, please get in touch.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at April 2023. Specific advice should be sought for specific cases. For more information see our terms & conditions.