Letting rooms – Airbnb and the bed and breakfast

3 April, 2017

The traditional way of starting up a bed and breakfast has been given a new slant in the modern world.  The rise of Airbnb has provided the opportunity for those with vacant properties or room to spare to let space out for short periods of time to travellers and holidaymakers on a casual basis.  How does this fit in with our rules and regulations on use of residential and commercial properties?

 

Permitted use of property is governed by the Town and Country Planning (Use Classes) Order 1987.  This provides classes or groupings of properties, and authorises use of particular buildings for particular uses.  The use classes relevant here are classes C1 and C3.  C1 use is granted for hotels, (including boarding and guest houses).  C3 use is granted for dwellinghouses.  Planning permission is required for a material change of the use of premises in some cases, and necessitates an application to the local council.

 

The question here is whether use as a bed and breakfast, for example through the Airbnb scheme, necessitates a change of use application from C3 to C1 use.  This will be determined by whether a “material” change of use has taken effect.  For example, if a room is let out on an irregular basis in a dwellinghouse occupied by a family, it is unlikely that the one room let will be material or substantial enough to require a planning application for a change of use.  The difficulty is that the decision on material changes lies with the local borough or district council.  This can result in different decisions being made by different councils in borderline cases.

 

One area where this sort of use has been discussed is in Greater London.  Prior to 2015, under the Greater London Council (General Powers) Act 1973 the provision of temporary sleeping accommodation would constitute a material change of use.  The Deregulation Act 2015 amends this so that the letting of short term sleeping accommodation will not constitute a material change of use provided the total annual number of nights does not exceed 90.  This amendment was introduced specifically to adapt to the growing temporary accommodation sector and such sites as Airbnb.  This gives a specific, measurable amount for the Council to base their decisions on.  Unfortunately, this only applies in Greater London.  In other areas, the discretion of the Council remains.

 

Following on from the change in the law in Greater London, Airbnb are now banning any hosts in London from renting out entire homes for more than 90 days unless they can show they have permission from the Council.

 

What practical difference does the classification from residential use at C3 to commercial use at C1 make?  Commercial properties are governed by different regulations for health and safety, building regulations and tax, amongst many other areas.  The required compliance with these aspects for commercial property owners are unintended consequences for most casual Airbnb members, who won’t anticipate having to comply with a range of commercial property requirements when letting out part of their home.

 

It is best and safest to seek the advice of the local planning authority before embarking on an Airbnb, bed and breakfast or hotel scheme to get a better idea on their view of the use classes and the distinctions between them.  Those living in Greater London will benefit from a little more certainty than the rest of us, who will need to look carefully at the materiality of the usage when making their business plans.