Manchester trials restricting short-term lets

When people think of Manchester these days, possibly their first thought is of its thriving economy and the opportunities it now offers. Alternatively, their first thought may be of its lifestyle options and its attractiveness as a tourist destination.

Both thoughts are an accurate reflection of the attractions of modern Manchester and both thoughts highlight the fact that the city needs to manage its housing stock in such a way that benefits local people without disadvantaging visitors, even if this means limiting options for investors.

Local residents versus visitors - the Airbnb issue

Local people need homes. Visitors need a place to stay and they do not necessarily want to stay in hotels. It isn’t just that hotels can be expensive, although that may be a factor for some people. It’s that hotels, by their nature, limit their residents' options, for example very few hotels offer decent self-catering facilities, usually because they want visitors to eat at either their own restaurants or the restaurants they recommend.

This might be fine for some people and probably nothing more than a minor inconvenience for many more, but for people with special dietary needs or even just preferences, it can be a major issue. People who suffer from food allergies may be particularly wary about eating in restaurants with which they are not familiar.

In other words, it’s obvious why some people may prefer staying in short-term private lets in preference to hotels, but, at the same time, it’s also obvious why local people could become very upset about residential property being effectively taken off the market and used for short-term lettings.

The challenge of managing cities

The Airbnb issue is arguably at its most acute in cities, not just Manchester, where accommodation is already at a premium, in fact, it has been an increasingly problematic issue for quite some time now and various local authorities have already started clamping down on it, often by limiting the length of time through which properties can be legally let through hosting platforms such as Airbnb.

Manchester, however, has taken this one step further and flat-out banned short-term lets or sub-lets in some of its new-build property. What’s more the terms of purchase mandate that this ban must remain in place (as a covenant) if the property is sold, thus preventing people from sidestepping the rules by, for example, buying the property as a private individual and then transferring it to a limited company.

The challenge of enforcing rules

Rules are all very well, but in the real world, they only have meaning if they are enforceable and in order to be enforceable, they have to be legal. At this point, however, only 3 landlords have actually come on the receiving end of enforcement action and none of them has (as yet) challenged that action in court.

Given the popularity of the short-term letting market, however, it seems entirely within the bounds of possibility, if not probability, that, sooner or later (and probably sooner), someone will raise a legal challenge to these rules as an unfair restriction of trade. Then the courts will have to decide whether or not local authorities have the power to insist that accommodation be reserved for long-term, local residents.

Mark Burns is the managing director at Manchester based estate agents Indlu.

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