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The trade body representing short lets providers and support companies has reacted angrily to government proposals for a radical shake up.

Housing Secretary Michael Gove has this morning proposed that planning permission will be required for future short-term lets; that there will be a mandatory national register; and that existing homeowners can continue to let out their own main or sole home for only 90 nights a year - any more and they will require planning consent.

The rules apply only to the short lets sector involving homeowners and small-scale landlords - not traditional bed and breakfasts or hotels, for example.

Andy Fenner, chief executive of the trade group the Short Term Accommodation Association, says: “We’ve been calling for a registration scheme for years, so it’s disappointing that when it finally arrives it completely fails to address the challenges the country is facing. 

“The registration scheme could have been game changing for tourism in England had it covered all types of accommodation but, instead, what we’ve got is a missed opportunity that’s a half-way house at best. Had it been that comprehensive, politicians up and down the country would have been able to make well-informed decisions on planning. 

“They’d have been able to see exactly how the tourist industry functioned in their local area, which is important because a one-size-fits-all approach that achieves the right balance in one place would crush the tourism in another. 

“Instead, the holiday let industry is doomed to continue being unfairly regarded as tourism's problem child, second-best to hotels, and unjustly taking the brunt of the blame game surrounding housing supply and affordability, despite the lack of a proper evidence base. The presumption is that, if you shut down all short term rentals tomorrow, the housing crisis would be solved but that is naive in the extreme. 

“The holiday let industry is not responsible for the housing crisis. Its causes run far deeper than that and are centred mainly on a lack of housebuilding and the abandoning of housing targets. 

“Short term lets are the modern, dynamic face of the tourism industry and we can’t force people into B&Bs and hotels through legislation. If we did, UK tourism would suffer as people voted with their feet and went elsewhere. The world has moved on, and many tourists don’t want to settle for that any more. 

"Restrictions in the number of short term rentals need to be measured against other important factors, such as employment, housing supply, housing need, and changes in the stock of other tourist accommodation. We will continue to call for a comprehensive registration scheme that includes all types of accommodation. 

“Without this, the new powers councils are winning, which will allow them to rein in holiday lets using an effective veto on permitted development rights, will be prone to misuse and political posturing rather than a desire to do what is in the best interests of local communities.”

A new report suggests that past impressions of Build To Rent and other institution-funded rental units as expensive and concentrating on securing professional tenants may be wrong.

Residential fund manager Hearthstone Investments - which currently has £450m of assets under management - has published a report basedon data collected from its portfolio of 1,800 rental homes, a mix of houses and flats in low-rise apartment blocks.

It claims the rental homes provide accommodation for residents on average UK incomes. Residents have a broad range of occupations: nurses, police officers, warehouse operatives, software engineers and chefs. In 2023, 27 per cent of residents were key workers.

The report also shows that 55 per cent of residents had moved 10 miles or fewer when they moved into a rental home in the portfolio which the fund claims is  “evidence of how the new homes are meeting specific local needs.” 

An assessment of local infrastructure around the properties covered in the report shows that 83 per cent of homes are located within 500 metres of public transport and 81 per cent of homes within 250 metres of public green space. 

It also says 45 per cent of its developments were transformative regeneration projects of brownfield sites” while “the ongoing management of rental homes creates permanent local employment for agents as well as contractors.”

Cedric Bucher, chief executive at Hearthstone Investments, comments: “There is a desire to better understand what impact these investments have on the economy and communities where they are focused.  Our latest report helps us to paint a picture for investors of what is being delivered and for whom, demonstrating value above and beyond capital returns.” 

He continues: “The site selection strategy deliberately focuses on areas not only where the supply/demand imbalance will secure long-term, stable returns for investors, but also where there is good quality social infrastructure –  services, green space, access to public transport – all factors which contribute positively to residents’ wellbeing.

“There is also a great opportunity to drive employment both in the short and longer term with local people involved in the construction and ongoing maintenance of the homes.

The latest Mortgage Market Tracker report from the Intermediary Mortgage Lenders Association reveals that confidence has returned to the mortgage market, with sentiment improving steadily month by month in the last quarter of 2023.

In total, 76 per cent of intermediaries said they were confident about the outlook for the market in September, falling to 69 per cent in October but then rising to 83 per cent by December. 

Of the 83 per cent, just over a fifth were ‘very confident’. The overall ‘confident’ figure for the quarter was 74 per cent. That is a marked improvement on Q4 2022, when 65 per cent said they were confident about the future for the mortgage industry.

Confidence levels in intermediaries’ own businesses were even higher, with 92 per cent of intermediaries describing themselves as confident in the outlook for their own firms in Q4 2023.

The average number of mortgage cases placed by intermediaries on an annual basis increased to 95 per year, compared to 92 in Q3. Mortgage brokers placed an average of 103 cases, while IFAs reported an average of 62.

Residential lending continued to accounted for roughly two-thirds of intermediaries’ business, buy to let around a quarter and specialist about one in 14 cases. The proportion of buy-to-let cases placed remained roughly the same as the previous three quarters of 2023.

Having increased to 25 in Q2, the average number of Decisions in Principle that intermediaries processed fell in Q4, with the lowest average of just 20 DIPs recorded in December and the Christmas period. The biggest falls were in DIPS for first-time buyer-focused brokers* and specialist-placing advisers.

In Q4 2023, conversions from DIP to completion remained stable at 38 per cent, close to mid-2022 levels. The overall conversion rate was broadly similar across all market segments except first-time buyer-focused brokers, who saw a six per cent fall. 

Brokers in the Midlands also saw a five per cent fall in DIP to completion conversions.

The conversion rate from full application to completion fell from 64 per cent in Q3 to 61 per cent in Q4, but was still up three per cent year-on-year.

Kate Davies, the executive director of the IMLA, comments: “It is interesting to note that the level of buy-to-let business remained broadly consistent throughout 2023, despite negative headlines. The slight drop in first-time buyer numbers was perhaps to be expected given the ongoing cost of living crisis and the increased challenge of saving for a deposit, on top of wider affordability constraints.

“These latest results are a testament to the resilience of intermediaries who have been operating in difficult conditions to secure the right solutions for their customers. Competition in the market is now lively, and lenders are confident that mortgage advisers will continue to work hard to find the most suitable mortgages for their clients from a vast array of products on offer. As a result, IMLA predicts that intermediaries will account for 89% of all mortgage business written this year.”