Karen Buck – 2022 Speech on the Sharing Economy and Short-Term Letting

The speech made by Karen Buck, the Labour MP for Westminster North, in the House of Commons on 16 June 2022.

I congratulate the hon. Member for Cities of London and Westminster (Nickie Aiken). As the Member for the other part of the borough of Westminster, I apologise for covering some of the same ground in respect of locality.

Having set up the all-party parliamentary group on the short lets sector, I am conscious that the issues that the hon. Member describes are having an increasing impact on cities, coastal communities and popular tourist areas across the country. Although it is always deeply unedifying to stand up in Parliament and say “I told you so,” I have to say that we told the Government so. During the passage of the Deregulation Act 2015, we warned that the changes allowing the 90-day limit in London would be likely to lead to an explosion in short lets and a very detrimental impact on communities—and that is exactly what has happened.

I remember saying in debates on the Deregulation Bill and on two subsequent ten-minute rule Bills—the Short and Holiday-Let Accommodation (Notification of Local Authorities) Bill and the Short and Holiday-Let Accommodation (Registration) Bill—that residential communities are being turned into unlicensed and unmanaged branches of the hospitality industry. The hon. Member has made many of the same points; I will not repeat them, but let me very briefly reinforce them.

As the hon. Member says, nobody is proposing any kind of ban. The sharing economy concept is a strong one. It is a smart and popular idea for people to let out a spare room or let out their home for a couple of weeks when they go on holiday or work abroad: it generates money in communities, generates money for the people who let the properties, and is clearly popular with the people who rent them. The digital economy has created enormous opportunities, and that is one of them.

However, the implementation has changed fundamentally since the original concept: it is now a highly commercial enterprise, as the figures show. A report in 2020—I have cited it previously, but I cite it again—found that just one sixth of the revenue of Airbnb, which is a major player in the field, came from the kind of home-sharing let that was its original concept. As the hon. Member says, we can track the huge shift to whole-property rentals, which has been very significant in London and across the whole country. Research by Tom Simcock of Edge Hill University has found a 423% increase in lettings by “multi-hosts”, owners of multiple properties. That gives an indication of how deeply and increasingly commercialised the sector is.

The impact is felt in the loss of residential property; the hon. Member made that point, and I endorse it. The clear indication is that it is financially advantageous to landlords to move out of the lettings market and into the short-let market, where they can make substantially more income and enjoy significant tax advantages in doing so. All over our borough of Westminster, properties where people could once live are being used just for the holiday industry. That has all kinds of impacts on people in housing need, and on communities.

There is also an impact on the management of antisocial behaviour and nuisance, ranging from noise to rubbish. If people were staying in hotels or in registered hospitality, there would be commercial arrangements for waste collection and they would be making a contribution. None of that applies in this instance.

This morning, entirely by coincidence, I received an email from a constituent on Harrow Road—not the heart of the west end, but the very north of my constituency, at the poorer end. I was told that five identified properties were now being let as short lets; people were coming and going with their luggage all through the day and night, and it was causing concerns about security. It is not necessarily that people choose to behave badly, or that they are acting in an especially antisocial way, but when people are on holiday they act differently. They do not have the same constraints as residents on the hours they keep or the way they act, and they certainly do not have the same sense of responsibility for security. It causes a great deal of anxiety.

It has been said, and I will repeat, that local authorities have their hands tied behind their back when it comes to enforcing against short lettings. Finding properties that are legally let under the short let arrangements but have to be acted on when they breach the 90-day rule is asking local authorities—cash-strapped local authorities—to do the almost impossible. They do not know who is letting. They would have to monitor everything to find that out and then be able to prove that the letting exceeded the 90-day limit. It is completely unreasonable to ask them to do that.

Landlords, particularly the commercial landlords that see the advantages of short let arrangements, are driving a coach and horses through the legislation. This is leading to enormous strains in local communities and a great deal of anger among neighbours, who turn to the local authority to help with enforcement but find that the local authority does not have the capacity to do so. Also, not unreasonably, the hospitality industry, which has had a terrible couple of years with covid, feels that there is not a level playing field, given its members’ responsibilities in terms of health and safety and taxation. They are being undercut, not by individuals letting out a spare room, but by major players in the corporate hospitality sector exploiting a loophole.

It is essential that the Government wake up to this problem. It is spreading across the country and the implications are profound. The Government can act very quickly, without excessive regulation, just to make sure that people who let out these properties are licensed to do so and that we know who they are. If we know who they are, we are in a better position to act when they breach the rules. We have been asking for this for seven years. It is a cross-party issue—cross-party in the local authority, Westminster, and cross-party in Parliament. The Minister must wake up and act to protect communities and to protect us against the loss of valuable residential property before it is too late.