Second home owners could be banned from renting their properties on websites such as Airbnb, in new plans drawn up by Housing Secretary Michael Gove, according to The Telegraph.
The proposals would prevent second home owners from renting out their properties as short-term vacation rentals, as the government cracks down on landlords who drive up house prices in vacation hotspots.
Mr Gove’s changes to the Leveling and Regeneration Bill would give regional mayors the power to ban people from renting second homes for less than 90 days. Instead, owners should apply for planning permission for a change of use.
Jonathan Samuels of brokerage Octane Capital said the proposals were another attempt to inflict pain on rental investors.
He said: “As with all government initiatives in the rental market, there appears to be little thought given to the unintended consequences that will occur when they further reduce the level of rental properties available on the market.
“As always, it will be the tenant who bears the brunt of cost escalation due to insufficient inventory.”
Geoff Garrett, of mortgage broker Henry Dannell, warned that pushing investors to buy-to-let out of vacation hotspots would also hurt homeowners.
“It will be bad for established families in places like Cornwall who have owned their homes for a long time,” he said. “On the other hand, it could be beneficial for some young people in these areas who are trying to buy for the first time and whose price has been overtaken by property investors from other parts of the country.”
A spokesperson for the Department of Leveling, Housing and Communities said: ‘We are taking action to address the negative impact second homes can have on local communities – particularly in tourist areas such as Cornwall – by eliminating tax loopholes, introducing higher rates of stamp duty and empowering municipalities to apply a tax bonus of up to 100% on second homes.
Mr Gove last week published plans to overhaul the private rental sector, which would improve tenants’ rights but expose landlords to additional costs and months of arrears.
Landlords will be forced to rent to people on benefits and reimburse tenants whose homes do not meet the new minimum standards, as part of the reforms.
Tenants will also get new rights to request to keep pets in their rental properties. The owners cannot refuse without a valid reason. The changes come as rate hikes on rental mortgages are already eating away at investors’ earnings.
Meanwhile, Brighton is set to become the first city in England to crack down on second home ownership.