Contribution
My Lords, I thank the noble Lord, Lord Best, for his amendment, which seeks to restrict the conversion of assured private rental sector tenancies into short-term lets, and the noble Lords, Lord Truscott, Lord Young and Lord Jamieson, and the noble Baronesses, Lady Coffey and Lady Thornhill, for taking part in this debate.
The Government recognise that while short-term lets can benefit the tourist economy, they can also impact on the availability and affordability of housing, including in the private rented sector. I understand noble Lords’ frustration that little has been done to assess the impact of this as its development has accelerated over recent years.
As we have discussed at earlier stages of the Bill, we share concerns that landlords may be leaving the private rented sector to instead provide short-term lets. The noble Lord, Lord Jamieson, gave some figures about reductions in the rental market, but statistics released on 28 April from Rightmove’s rental tracker told a very different story. Its property site found that the number of new properties coming to the market in March was 11% ahead of the same period last year, while the overall number of rental properties is 18% up on 2024, just months before the legislation is set to come into force this summer, so there are differing opinions about the impact.
To address the issues that noble Lords have raised, the Bill includes a provision to ensure landlords will not be able to evict tenants simply to return the property to a holiday let. As many noble Lord will be aware, we have also abolished the furnished holiday lets tax regime. As a result of that measure, landlords will no longer be incentivised by the tax system to make their properties available as short-term holiday lets rather than longer-term homes for people who want to live and work in the area.
The Government will also introduce the short-term lets registration scheme, as legislated for in the Levelling-up and Regeneration Act 2023. The scheme will collect crucial data on the sector and ensure that all providers of short-term lets are aware of their legal responsibilities to ensure that health and safety standards are met in their property.
With regard to the comments made by the noble Lords, Lord Best, Lord Truscott, Lord Young and Lord Jamieson, we are committed to robustly monitoring and evaluating the reform programme and have set out how we are developing our approach in the impact assessment for the Bill. Our approach builds on the department’s existing long-term housing sector monitoring work, and we will conduct our process impact and value-for-money evaluation in line with the department’s published evaluation strategy. We are not going to just drop the Bill and leave it; we will continue to monitor the situation.
The noble Lord, Lord Best, and the noble Baroness, Lady Thornhill, asked when the register will be operational. The Government are keen to introduce the registration scheme for short-term lets in England as soon as possible. The initial phase of digital development is now complete and public testing is planned to start in the next 12 months. During this next phase of work, we will test a working interface with a small number of users to make sure that the systems and processes are robust and effective before publicly launching a first version of the service. It is on its way; we have started working on it and will bring it forward as quickly as we can.
The noble Lord, Lord Truscott, asked a question about energy performance standards for the PRS and short-term lets. On 7 February this year, DESNZ launched a consultation on increasing minimum energy efficiency standards in the domestic private rented sector. The consultation includes proposals for rented homes to achieve an EPC C or equivalent by 2030. DESNZ is also seeking views on whether short-term lets should be included in the scope of these changes to help ensure a common standard across all private rented properties.
The proposed amendment seeks only to allow councils to place restrictions on the change of use from a private rental property to a short-term rental property and would not affect the change of use of owner-occupied properties. The amendment seeks to achieve this via a change to the Town and Country Planning (Use Classes) Order 1987. However, it would not have the intended effect, as the use classes order does not permit the change of use in the way proposed.
I assure noble Lords that we are carefully considering what additional powers we might give to local authorities to enable them to respond to the pressures created by short-term lets. However, I also recognise the complexities of introducing such restrictions, so I believe we need to explore the various potential levers that could help achieve that better balance that we all want between housing and the tourism economy before moving forward. I therefore ask the noble Lord, Lord Best, to withdraw his amendment.