"Is Airbnb allowed in London?" A common question among property owners in London, given the increasing popularity of Airbnb as a lucrative income source.
From December 2018 to July 2020, Airbnb listings in London skyrocketed by a staggering 470% (rising from 18,436 to 87,235).
Despite the popularity of this home-sharing model, it's crucial to understand the regulations and laws governing short-term rentals in the city to circumvent potential legal complications.
This guide will walk you through the legal status of Airbnb in London, along with the rules directing Airbnb ownership and management.
Discover more about the rental laws applicable to Airbnb, providing insights to navigate this type of rental property in your city.
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Is Airbnb Legal in London?
When it comes to the question, "Is Airbnb allowed in London?" the simple answer is yes. Airbnb rentals are legal in London, but they're subject to specific regulations and guidelines. The UK government acknowledges the growing popularity of these short-term rental properties and has enacted laws to both support their operations and ensure they comply with local ordinances.
Most Airbnb listings in London are strategically located in the bustling city centre, catering to tourists and business travellers alike. Prime Airbnb locations span across renowned boroughs such as Kensington, Camden, Westminster, Bloomsbury, and Fitzrovia.
The Rising Popularity of Airbnb in London: Why Tourists and Hosts Prefer It
London is a metropolis that seamlessly blends history and modernity, making it an ideal destination for those craving a vibrant, fast-paced lifestyle. The city's rich cultural scene, boasting dynamic music and nightlife, diverse foodie communities, free museums, galleries, and historical architecture, has made it one of the world's top travel destinations.
This appeal drives a significant demand for vacation rentals in London. As per London Tourism Statistics, the city magnetises approximately 30 million global visitors annually. These travellers are increasingly turning to Airbnb, a brand already familiar to them, for affordable and comfortable accommodation options during their stay.
This is just one of the top-performing Airbnb properties we manage at Houst. Its attractive and comfortable design, combined with our expert management, has made it a favourite among visitors to London. With a stylish living space and modern amenities, this property epitomises the quality and convenience travellers seek when booking an Airbnb in the city.
Airbnb properties often offer a more cost-effective and spacious alternative to standard hotel rooms in London. Moreover, the guidelines governing Airbnb ownership and management in the city are less stringent compared to other global cities. This relative ease in the process makes it not only simple for travellers to find suitable accommodations but also for property owners to become successful Airbnb hosts in London.
Licence Requirements for Operating an Airbnb in London
Are you considering renting out a property on Airbnb in London? If so, it's important to know that all hosts need a licence for short-term rentals in the area. The specific requirements for this licence can vary, depending on the nature of your Airbnb business.
For a comprehensive list of licensing requirements, consult the UK Government’s Licence Finder. It's crucial for landlords to include a valid registration number in every online ad for their short-let accommodation. Additionally, they must clearly state whether the listed rental property is their primary residence or not.
The 90 Days Rule for Airbnbs in London
In an effort to regulate the short-term rental market, the UK government has implemented a 90-day rule for Airbnb hosts in London. This rule stipulates that a property cannot be rented out for more than 90 days in a year, whether consecutively or cumulatively.
Exceeding this limit transitions the property status from a short-term rental to a mid-term rental or lease. This could potentially subject Airbnb owners to fines or other penalties.
The 90-day rule was established in 2017, designed to legalise short-term rentals without the need for a planning permit. Before this legislation, landlords in London had to apply for planning permission for change of use if they wanted to rent out their homes. Now, this step is only necessary if the property owner intends to exceed the 90-day limit.
Airbnb has put measures in place to help hosts maintain compliance. Once a property reaches the 90-day limit, Airbnb automatically restricts further bookings. This rule, while important for regulation, does limit the potential return on investment for property owners.
At Houst, however, we have solutions to help you optimise your earnings while staying within the rules. Continue reading to learn how. Read on to learn how.
Navigating the Airbnb Planning Permit Application in London
Interested in renting out your property for more than 90 days a year in London? You'll need to apply for a planning permit. The application process involves several steps:
- Submit an application form to your local council. This should include a comprehensive description of your property and the duration of its availability.
- Provide detailed information about potential occupancy during peak periods, and any specific considerations like pets, smoking, or children’s play areas.
- Pay an application fee of £400.
However, obtaining a planning permit isn't guaranteed. The process can be challenging, particularly as local authorities are seeking to regulate short-term rentals due to their impact on housing prices.
To assist you, Houst has developed a strategy that could increase your chances of obtaining a permit:
- Ensure your property does not adversely affect the neighbourhood, for example, by causing noise disturbance or environmental hazards.
- Consider engaging an experienced planner to help navigate the application process.
Remember, the Houst team is always available for any questions you may have during the process.
Understanding Tax Obligations for Airbnb Income in London
Airbnb income in London is taxable as it's deemed a form of lodging. However, the tax payable varies based on the type of short-term rental. For instance, landlords who rent out a furnished room in their primary residence can take advantage of the “Rent a Room Relief.” This scheme allows landlords to avoid paying taxes on rental income up to £7,500 within a calendar year. If the rental income surpasses this threshold, landlords are required to declare it on a UK self-assessment tax return and pay the corresponding tax.
This tax rule also applies when landlords rent out an entire apartment, regardless of whether the income exceeds the threshold. To get an estimate of your potential monthly earnings from your property, consider using our property estimate calculator.
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How Houst Simplifies Your Airbnb Management in London
Navigating through all the restrictions and regulations, you might be wondering, “Is running an Airbnb in London really worth the hassle?” We believe it is. At Houst, we have managed over 250,000 Airbnb bookings and have learned that most legal issues arise from inadequate property management.
If you're a property owner who's also handling management, juggling these responsibilities can be challenging, especially when you have other commitments. But the good news is, you don't have to do it all by yourself.
Houst offers comprehensive services to support your Airbnb venture. We handle everything from listing your property, ensuring compliance with local regulations, optimising your earnings, to housekeeping, laundry, and even offering 24/7 guest support and quarterly property checks.
Unlock the true potential of your rental property in London with Houst - Earn up to 56% more than traditional long lets.