June 14, 2023 9:23 pm

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James Nicholson

What Is The 90-Day Rule?

The 90 day rule was established to regulate all short term rentals of property in Greater London.

According to the rule, properties can only be rented out for a maximum of 90 days per year on a short-term basis.

This was implemented to prevent properties being used on a permanent basis as short term rentals. The goal was to stop local communities being impacted negatively according to lawmakers.

The 90 day limited can be applied in two ways, either as a consecutive period of 90 days or 90 days spread throughout a calendar year. This is often called the Airbnb 90 day rule due to the actions that company took in 2017.

Airbnb implemented an automatic closure of bookings for any London property once they had achieved 90 days of rentals in a calendar year. The only way around this was for the owner to provide evidence of necessary planning permission.

It’s important to note that the 90 day rule existed before Airbnb self imposed restriction. The restriction was a response to the Deregulation Act of 2015. The act introduced changes to the Greater London Council (General Powers) Act of 1973 in 2015.


What Led To The Implementation Of  The 90 Day Rule?

The introduction of the 90 day rule in London made it legal to rent your property short term.  This resulted in homeowners utilising platforms like Airbnb and booking.com to rent out their properties for brief periods.

Prior to 2015, London property owners who wished to rent out their home on a short term basis were required to obtain planning permission for change of use. Failure to get permission could have led to fines of up to £20,000.

Consequently, many homeowners turned to websites such as Airbnb to rent out their homes for short durations. People often ignored the rules even though this was unlawful and subjected them to potential huge fines of up to £20,000.

Brandon Lewis who was the Housing and Planning Minster at the time said, the legislative change aimed to grant Londoners the same freedom and flexibility other individuals in other parts of the country have to temporarily let their homes. This removed the undue burden of obtaining planning permission.

Additionally, it was intended to promote London’s tourism industry and give homeowners extra income.

Is The 90 Day Rule Exclusive To London?

Currently the 90 day rule exclusively applies to London. Nonetheless, Paris has implemented a similar regulation knows as the 120 day rule albeit with different underlying motives.

Edinburgh is preparing to introduce new regulations that will mandate planning permission for all short term lets that are not used as personal residences.

What Are The Implications Of The 90 Day Rule?

The 90 day rule encompasses any form of short term letting in which people pay to stay at a property. This includes various types of accommodation such as Airbnb, holiday lets and serviced accommodation.

It also includes owners renting out their homes to visitors of events like Wimbledon, Football tournaments, or concerts.

What Options Do Landlords Have To Continue Renting Their Property After Surpassing The 90 Day Limit?

As a landlord seeking to rent out your non-primary residence on a short term basis in London while following the 90 day rule. Here are some ways to maximise rent while staying legal.

  • Apply for a change of use. The main legal method to rent your property for more than the 90 day limit in a calendar year is to apply for planning permission for a change of use to your property. There are no guarantees your application will be approved.
  • Use a hybrid letting strategy. Use a hybrid approach by diversifying the types of tenancy agreement you offer. During the most profitable periods, normally the summer season, focus on short term lets. For the remainder for the year look for tenants interested in medium terms stays of 3 to 8 months.

Using these strategies landlords can potentially maximise their revenue while ensuring their compliance with the 90 day rule in London.

Points In Support Of The 90 Day Rule

The 90 day rule offers advantages to homeowners seeking to generate additional income by renting out their properties on a short term basis.

For example if you are going on holiday, using your own holiday home, or temporarily working away. Imagine sitting on the beach in Thailand knowing the cost of your holiday is covered the rental income from your home.

By eliminating the need for planning consent for short term lets, the rule has has given more homeowners the opportunity to get some extra income each year.

With a limit 90 days, the rule can be seen as granting local council control over their local housing supply.  It ensures that the constant influx and turnover of tenants throughout the year is mitigated. This maintains a more stable residential environment for other local residents.


Counterarguments To The 90 Day Rule

Certain individuals advocate for homeowners to have the freedom to engage in year round short term lets of their properties. Obviously under the condition that their guests are considerate, law abiding and respectful to the local community.

Homeowners can pursue this option if they successfully acquire the correct planning permission.

However a lot of apprehensions have been raised regarding the de-regulation of short term lettings in 2015. Its been suggested that Airbnb and short term lets have contributed to a decrease in availability of housing for long term residents.

Nevertheless at present there is no conclusive evidence that short term lets have caused a housing shortage in London.


Which Mortgage Options Are Suitable For Short Term Lets?

You must inform your mortgage lender if you intend to rent out your property as serviced accommodation.

If you are the owner-occupier and only renting out the property for short periods while you are away. The mortgage lender may permit this under your standard mortgage agreement.

If you plan to rent out the property as a business, you’ll need a commercial mortgage instead of a standard buy-to-let mortgage.

I go into more detail on Serviced Accommodation mortgages here.


Are There Any Loopholes To Circumvent The 90 Day Limit On Airbnb In London?

No, it’s not possible to circumvent or evade the 90 day rule imposed on Airbnb in London.

The restriction is in place to ensure the sustainability of Airbnb and short term rentals within the city. The aim is to minimise disruption and maximise the advantages of the tourism industry.

However there are alternative strategies that can assist property owners in maximising their earnings while operating within the regulations.

One effective strategy is to utilise a combination of different types of rentals. By using medium term and long term leases for the remaining period after you hit the 90 day limit.

For instance property owners can list their property on Airbnb during the busy summer months. Then after the summer is over rent to corporate or long term travellers for the rest of the year.

As more people work remotely and become digital nomads, there is a greater need for renting places in London for 3-6 months.

While it may be tempting to try to surpass the 90-day limit, it is crucial to adhere to the regulations.

Explore available options to maximise earnings, benefiting both the property owner and the local community.

Find our more about Section 24 Tax and Serviced Accommodation here.




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