However, the activist group has come out against this form of regulation, wanting instead a more convoluted system of regulation put forward by backbench Labour MP Rachael Maskell.
Maskell wants councils to be able to issue temporary licences for Airbnb and other short lets, and should have the powers to cap their number. Her Bill on the subject will be debated in the Commons on Friday - but it is thought to have little chance of becoming law.
However the deputy director of Generation Rent, Dan Wilson Craw, backs the Labour proposal over the government’s.
He says: “High nightly rents and the lack of tax and regulation have fuelled an explosion in holiday lets at the expense of people who just need a place to live. In many parts of the country that is forcing people to move away from the places they grew up, and leading to shortages of workers.
“The government is beginning to recognise the need to intervene. However, it is not clear that planning changes are the answer given how limited their impact has been in London. The permanent nature of planning permission would also make properties designated as holiday lets disproportionately more valuable than other properties.
“Instead, councils should have the power to require holiday lets to have a time-limited licence, and cap their number where there is a severe shortage of homes. This would be a more flexible and responsive approach than using the planning system, and would be easier for councils to enforce.”
Wilson Craw claims that England’s housing supply lost nearly 11,000 properties to the second home and holiday let sector between 2021 and 2022 - and he says this continues a trend of homes leaving the residential sector that has accelerated in recent years, and is equivalent in some areas to the loss of more than two per cent of the housing stock between 2019 and 2022.
A statement from the activist group - which is led by former Labour peer Baroness Alicia Kennedy - says: “Holiday lets face very little regulation, meaning they are a more lucrative option for landlords in tourist hotspots. On Friday, Rachael Maskell MP is introducing a Bill to the Commons that would give local authorities the power to require holiday let operators to obtain a licence in order to let a property to tourists.”
The group claims that between 2021 and 2022, the number of second homes in England increased by 3,556, to 256,913. The number of holiday lets increased by 7,153, to 73,624.
While this is a similar increase in holiday lets to the 7,102 seen during 2020-21 - when pandemic restrictions on international flights led to a boom in domestic tourism - the growth in second homes has accelerated from 807 in that year.
The list produced by Generation Rent to show the apparent increase in holiday lets and second homes does not tally fully with high value tourist areas.
So for example Leicester saw the biggest loss of primary homes, mostly to second homes, equivalent to 2.2 per cent of the city’s 2020 housing stock. This was followed by Scarborough, South Hams in Devon, the London borough of Southwark, and Copeland in Cumbria which - according to Generation Rent’s calculation - all saw more than one per cent of their housing stock move into the second homes and holiday lets sector in the space of three years.
The group says in a statement: “The effective loss of homes serving as primary residences places upward pressure on rents. At a regional level, the East Midlands lost 2.0 in every 1,000 homes to the holiday sector and the South West lost 1.9 in every 1,000 homes between 2019 and 2022. These regions also saw the highest rent inflation in the same period, of 10 per cent, as measured by the ONS. London had the lowest change in homes classed as second homes and holiday lets (0.1 in every 1,000 homes) and the lowest rent inflation in England, of three per cent.”
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