“Is Airbnb allowed in London?” This question is quite popular among London property owners. Airbnb has become a popular way for people to make extra income by renting their homes or spare bedrooms in London. Between December 2018 and July 2020, the number of Airbnb listings in London increased by 470 per cent (from 18,436 to 87,235).

Even though this home share model is popular, you need to understand some regulations governing short-term rentals in the city to avoid any potential legal issues.

Here, we will guide you through the legal status of Airbnb in London and the rules that guide Airbnb ownership and management. Read on to learn more about the rental laws that apply to Airbnb with this type of rental property in your city.

Is Airbnb Allowed in London?

Firstly, on answering “Is Airbnb allowed in London?” Yes, Airbnbs are allowed in London but are subject to specific regulations and guidelines. The government recognises the popularity of these rental properties and has established laws to support and regulate their operations.

Most Airbnbs in London are located in the city centre. The most popular locations include Kensington, Camden, Westminster, Bloomsbury, and Fitzrovia.

Why are Airbnbs Popular in London?

London is an ideal city for those looking for a fast-paced lifestyle. Blessed with booming music and nightlife scenes, free museums and galleries, historical architecture and a thriving foodie community, the city has always been one of the world’s most popular travel destinations. Consequently, the demand for vacation housing when tourists stay in London has increased dramatically.

London Tourism Statistics reveal that London attracts around 30 million visitors worldwide annually. These tourists already know Airbnb as a brand and that the platform can save them money during their stay.

Airbnb properties are often cheaper than a standard hotel room in London and have more space than them. Additionally, the rules governing Airbnb ownership and management are less stringent in London than in other cities across the world. So it’s relatively easy to become an Airbnb host in London (if you know what you're doing); likewise, it’s easy to find a place to stay!

Do I Need a Licence for Airbnb in London?

Yes, anyone renting a short-term rental in the London area must have a licence. The licence requirements vary depending on the type of Airbnb business you run. Please see the UK Government’s Licence Finder for a complete list of licence requirements.

Landlords must provide a valid registration number on any online ad for short let accommodation. They also have to specify whether or not the rental is their primary residence.

The 90 Days Rule for Airbnbs in London

The UK government has implemented a limit on how many days an Airbnb host can rent out their property. Airbnb hosts in London cannot rent their property for longer than 90 days a year.

This restriction applies to both 90 days in a row or 90 days throughout the year. If the landlord rents out the property for more than 90 days, the accommodation no longer counts as a short-term rental but a mid-term rental or lease. In that case, the Airbnb owners could be subjected to fines or other penalties.

There are several reasons why London’s Airbnb hosts cannot rent their property for more than 90 days a year. This restriction is designed to legalise short-term rental without applying for a planning permit. Before the establishment of this law in 2017, landlords in London wishing to rent out their homes needed to apply for planning permission for change of use.

Now, this step is only necessary if the property owner intends to rent out the entire property for more than 90 days. To help property owners maintain compliance, Airbnb automatically closes booking on their property once your 90 days limit has expired. This, in turn, limits the ROI landlords can get on their properties.

On the flip side, at Houst, we can help you optimise your earnings for more than 90 days without going against the regulations. Read on to learn how.

How to Apply for An Airbnb Planning Permit in London

If you plan to rent out some rooms or your whole property for over 90 days;

• You must submit an application form to the local council.
• You must provide a detailed description of your property and how long it will be available.
• You also need to include information about the number of guests staying at the property during peak periods and any special requirements such as pets, smoking, and children’s play areas.
• Finally, you will pay a £400 fee.

There is no guarantee that you will be able to obtain a planning permit. The permit approval process is quite daunting, considering that local authorities are seeking to cut down on short-term rentals due to their impact on house prices.

To save you stress, we have curated a novel procedure that can increase your chances of obtaining one.

• First, ensure that your property doesn’t negatively affect neighbours’ homes. For example, releasing toxic household wastes and chemicals, loud noises, or tree disputes.
• Second, consider working with an experienced planner who can help you navigate the bureaucracy.

If you have any questions, please do not hesitate to contact the Houst team.

Tax on Airbnb Income in London

Airbnb income is taxable in London because the government considers it a form of lodging. However, the payable tax depends on the type of short-let. For example, a landlord renting out a room that qualifies as furnished in their primary residence can claim “rent a room relief.”

This rent a room scheme means landlords don’t have to pay taxes on rental income below £7,500 in a calendar year. However, if the rental income exceeds this threshold, they must declare it on a UK self-assessment tax return. and pay tax.

Landlords must also do the same when renting out the entire apartment, whether or not they exceed the threshold. If you’re unsure of how much your property can earn in a month, use our property estimate calculator.

How Can Houst help you?

With all the mentions of restrictions and regulations while answering, “is Airbnb allowed in London?” you’re probably thinking that running an Airbnb is such a hassle. But we disagree. From our experience managing over 250,000 Airbnb bookings, we’ve found that most legal issues occur due to poor management. If you’re a property owner that also does the management, it can be hard to maintain your short-term rental when you have other business to attend to.

Well, you don’t have to do it all by yourself. Let Houst help you take care of everything from listing, to compliance, optimising your earnings, to housekeeping and laundry, to 24/7 guest support and quarterly property checks. If you have any questions, contact the Houst team today.