Newsletter | December 2011 | Council kill-joys stop short lets during the Olympics

Why ban short lets for the Olympics, asks Sebastian O'Kelly?

Why on earth was Westminster City Council last month sticking up posters and sending out leaflets threatening £20,000 fines for those who might be tempted to make a little money during the Olympics by renting out their homes?

Those who regularly let out their properties for less than 90 days ought to apply to have a short-term tenancy licence, which is a change in the planning designation.

But it is by no means clear that those who occasionally do so should have to apply, and those who rent out their homes on conventional longer leases do not need to do so at all.

On the forest floor of London’s economy, thousands of hard pressed pensioners and others using their initiative to make a bit of money during sporting occasions such as Wimbledon, rent out their houses.

Provided they pay up any income tax owed, no one hitherto has been much bothered.

But then Westminster Council decided to stick its boot in with its draconian threats, very unattractively inviting neighbours to snitch on those renting out their homes.

Last week, however, the council was desparately backtracking from this stance.

“The posters were a bit officious, but we are not going to be coming after people who have just rented out their flat over the Olympics,” said a spokesman.

The more serious, and legitimate concern of the council, is that pop-up guesthouses will suddenly emerge during the Olympics in the most touristically appealing part of London.

Westminster’s council tenants, who have been known to sub-let their properties in the past, might also be tempted to cash in, and then there well founded fears about people from abroad using residential addresses in order to exploit health and social services.

“Short term lets are an agreed planning policy and require permission where it is allowed hence the standard fee,” says Rosemarie MacQueen, Westminster City Council’s strategic director for the built Environment.

“This isn’t about targeting residents who rent out their homes when they go on holiday or away on business. Rather, in Westminster, there is a growing economy of ‘pop-up’ hotels, with landlords buying up properties, then cramming people into them just to make a quick profit. In some cases we have seen eight people or more squeezed into two-bed properties.

“Residents who live in blocks of flats with short-term lets also feel their quality of life has gone down. There's a fear of crime, short term residents don't treat the place like home, and there are constant problems of noise and litter.

“There may be circumstances in which residents can rent out their homes for short periods, and we know many will want to during the Olympics. All we ask is that they apply in advance. It means their neighbours can be notified and we can ensure areas aren’t being over-run with short-term lets.”

It is worth noting that Kensington and Chelsea next door has issued no similar request that those offering Olympics lets ‘apply in adavnce’.

Behind all this is the suspicion that Westminster Council was doing a bit of cashing in itself: raking in licence fees from residents who may only ever rent out their properties once.

And Ms MacQueen’s department has a slightly chequered reputation on this score.

Shortly before she softened her tone regarding the tenancy licenses, Ms MacQueen, who is paid £167,000 a year, had proposed Sunday and evening car parking charges at £4.80 an hour in the West End.

The result was a storm of protest from local leisure business and condemnation from both London mayor Boris Johnson and his Labour rival Ken Livingstone.

“What’s happening is nothing to do with regulating congestion or improving the environment and everything to do with ripping off Londoners to fill Westminster’s coffers,” said Livingstone.

Silvia Lawson Johnson, founder of short-term tenancy agency Aplacelikehome.co.uk, is convinced Westminster’s proposal was seen as a potential revenue earner.

“We avoid Westminster and if I get an inquiry from there I make it clear that they must get in touch with the council,” she says.

“Westminster is being particularly stiff on this, while Kensington and Chelsea have a softer view.”

Chris Norris, of the National Landlords Association, reckons Westminster will have great difficulty in policing unlicensed short-term lets.

“We can understand why they are keeping an eye on this. Westminster doesn’t want unofficial guesthouses popping up all over the place and they want to maintain the number of proper households in the borough.”

“It is going to be very difficult to determine what is a short-term let or a longer, normal let,” he says. “Westminster does have unique problems with rogue guest houses, and there is also a powerful hotel lobby.”

This has already made its voice clear in regard to room-letting websites such as crashpadder.com, where homeowners rent out a spare bedroom to visitors.

The hotel lobby has highlighted the old fail-safe of ‘elf ‘n’ safety, rather ignoring that quite a number of grisly murders – the assassination of ex-KGB man Alexander Litvinenko, for example – have taken place in London hotels.

One has seen this sort of thing before in the property world. When licences for houses of multiple occupancy came in in April 2006, councils quickly saw the opportunities.

Newcastle charges £1,100 for each HMO licence, while Basingstoke charges just £250.

And why were HMO licences introduced in the first place? After sustained lobbying on government from the private student hall of residence providers, who wanted to wipe out competiton from small landlords.