You must be fully aware of the 90-day rule if you plan to rent out a property in London for a short term rental or already do so.

Here, we go over the 90-day rule, its history, and its possible effects on property owners.

What Is The 90-Day Rule?

According to the 90-day rule, a property in Greater London may only be rented out for a maximum of 90 days in a given year. This eliminates the possibility that the home would be rented out for short terms year-round, which legislators believe would be detrimental to the neighbourhood.

The cap is in effect for either 90 days in a row or 90 days dispersed throughout the course of the year.

Airbnb decided to automatically close bookings for any London home that had been rented out via its platform for the ninety-day period in 2017. Unless the owner could demonstrate they possessed the necessary planning authority, this decision is frequently referred to as the “90-day rule.”

However, the law predates Airbnb’s prohibition, which was implemented in reaction to the 2015 revisions to the Greater London Council (General Powers) Act brought about by the Deregulation Act 2015.

Why Was The 90-Day Rule Introduced?

Since the 90-day rule was implemented to make short-term rentals lawful in London, a lot of homeowners have been renting out their houses for brief periods of time through websites like Airbnb. Before 2015, owners of real estate in London who wanted to rent out their “whole home” for a short period of time had to apply for a change in use permit from the planning office. Failing to do so might have resulted in fines as high as £20,000.

This resulted in a lot of homeowners renting out their houses for brief periods of time via services like Airbnb. It was illegal to do so, and there might have been £20,000 in fines.

The rule was changed to give Londoners “the same freedom and flexibility as the rest of the country to temporarily let their homes, without the disproportionate burden of requiring planning permission” as stated by the then-housing and planning minister Brandon Lewis.

It was also meant to help London’s tourism sector and give homeowners who wished to rent out their properties additional money while they were away.

It was also meant to help London’s tourism sector and give homeowners who wished to rent out their properties additional money while they were away.

Does The 90-Day Rule Only Apply In London?

Indeed, for the moment, the 90-day rule is exclusive to London. Paris, meanwhile, has a 120-day rule that is comparable, while having been implemented for distinct purposes.

Additionally, new regulations are about to take effect in Edinburgh, requiring planning permission for any short-term rentals that aren’t principally utilised as residences.

What Types Of Rentals Does The 90-day Rule Apply To?

Any short-term rental where a party pays to remain at the property is subject to the 90-day rule. This includes people who rent out their homes for people to attend sporting or cultural events like Wimbledon, football tournaments, or concerts, as well as vacation rentals, serviced apartments, and Airbnb leases.

Consequences Of The 90-Day Rule

The 90-day rule was originally intended to relieve homeowners of the need to obtain planning approval in order to rent out their London houses for a brief period of time.

The Greater London Authority (GLA) is concerned that the removal of property supply from the market to make it available for short-term leasing may be aggravating London’s housing crunch. They point out that there are indications that short-term letting platforms are becoming more commercialised.

The GLA discovered in a 2020 report that between 2015 and 2019, the number of Airbnb listings in London increased fourfold, with a 15-fold spike in outer London.

Even while Airbnb only allows reservations for 90 days, property owners have plenty of other rental platforms to choose from if they’d like to break the law and stay longer.

Short-term rentals, according to a December 2016 Institute for Public Research research, appear to have minimal effect on London’s housing scarcity.

How Can Landlords Continue To Let Their Property Once They Have Exceeded The 90-Day Rule?

How can a landlord maximise income while adhering to the 90-day rule while renting out a home in London that isn’t their primary residence for a brief period of time?

• Request a change of use: In London, you are only able to lawfully rent out your property for a shorter period of time than ninety days a year if you request a change of use from the planning department. It is not certain that it will be approved.
• Tenant the property under various forms of tenancy: Employ a hybrid leasing approach by finding tenants who would like to rent for three to eight months during the year, then using short-term rentals during the busiest times of the year (usually the summer).

Arguments For The 90-Day Rule

The 90-day rule is advantageous to homeowners who wish to supplement their income by temporarily renting out their house, either for work purposes, while they are on vacation, or while they are staying in a second residence.

It has given tenants and homeowners more options by doing away with the need for planning approval for short-term rentals.

One could argue that local councils have more influence over local home availability by limiting the number of rental days at ninety. It also implies that there won’t be an endless influx and emigration of individuals throughout the year, which is good news for other locals.

Arguments Against The 90-Day Rule

Some contend that landowners should be able to short-term rent out their property year-round as long as their visitors are considerate, abide by the law, and don’t cause any disturbances to the neighborhood.

Of course, if they can secure the necessary planning permission, they might be able to carry out this.

Though there isn’t any concrete proof as of yet, there are worries that the deregulation of short-term rentals in 2015 has decreased the number of long-term housing options available.

Conclusion

We hope that this post has helped you understand a little bit about what the 90-day rule, the history, the rational, pros and cons. Prior to making an investment in real estate and beginning to earn money as a landlord, it’s critical to comprehend the legal criteria.