Home | The Finest Stays Blog | News | Holiday let Regulations

Filters

Jul 25, 2024 | News, Property Owners

Understanding changes to holiday let Regulations: A guide for holiday home owners

As a holiday home owner, it’s crucial that you’re well informed about the government’s regulations for short term lets. New holiday cottage rules were outlined by Rishi Sunak’s Conservative Government to implement changes in the planning laws and the introduction of a new national registration scheme. These new regulations can have a significant impact on how you manage your holiday let. So in this blog we’re going to summarise the proposed changes to ensure that you, as an owner, can stay compliant and ultimately maximise the rental potential of your holiday home.

Overview of current Regulations for holiday lets

Currently, to qualify as a furnished holiday let, owners need to comply with the following regulations. Meeting these criteria and running your holiday let as a business will offer favourable tax benefits. That said, it’s not compulsory to do so; it just means that you won’t reap the tax benefits. 

How to qualify as a furnished holiday let under the current regulations: 

  • Your property should be fully furnished
  • should be available for let for a minimum of 210 days
  • should be let for a minimum of 105 days per annum
  • no long term tenancy exceeding 155 days per annum
  • as owners, you should not be resident for more than 31 days in any one tax year
  • you should let the property with a holiday letting agency such as ourselves and show that you intend to make profit.

It is important to have an understanding of the roles of local and national government bodies and how they work together to enforce the rules for holiday lets: 

National Government 

The National Government sets the legislative framework of guidelines for short term holiday lets. This outlines the regulations including health and safety, occupancy and taxation policies which apply to rental income: VAT, income tax and other relevant taxes. 

Local Government

Local government is more involved in the day to day regulations and includes safety inspections and compliance. Local authorities can restrict short-term rentals in certain residential areas in order to maintain a balance between the needs of residents and tourists.

Recent changes to holiday let regulations

In the new regulations the government aims to “give communities greater control over short-term lets in tourist hot spots, while also strengthening the tourism sector.” These proposed new changes will see the introduction of a mandatory national register which will provide information about the short term holiday lets and ensure they meet safety standards. 

Proposed ‘use class’ for short term holiday lets

“The proposed planning changes would see a new planning ‘use class’ created for short-term lets not used as a sole or main home. Existing dedicated short-term lets will automatically be reclassified into the new use class and will not require a planning application.”

New rules for holiday lets in 2024

  • New owners will need to get permission from the council to turn their home into a short term holiday let
  • the introduction of a mandatory national registration scheme to provide property information and to ensure safety guidelines are met. A national register would make it clear to owners what their responsibilities are and, in confirming their compliance, would give holidaymakers greater comfort by knowing they’re letting from responsible owners
  • fire safety
  • a restriction to the number of guests allowed to stay in the property with the aim of reducing noise and congestion, especially in residential areas 
  • inspections: Mandatory health and safety inspections to ensure compliance with local standards.

The rules will not apply to people renting out their main home for less than 90 nights a year.

There are some key changes to health and safety regulations which include: 

  • More stringent requirements for smoke detectors and fire extinguishers, all fire escapes must be clearly marked
  • carbon monoxide alarms: Mandatory installation of carbon monoxide alarms in properties with gas appliances.

With the focus on tax compliance, changes should mean a fair taxation of rental income:

  • All your rental income should be recorded and reported to HMRC
  • VAT compliance – you should register for VAT if your income from letting your holiday home exceeds the thresholds. You will only need to pay VAT on your holiday home if your business income should exceed £90,000 which is the VAT threshold. You can choose to pay VAT if your income is less than the specified £90,000 by registering voluntarily for VAT
  • read our blog about VAT on holiday lets for more information.

To address housing shortages and reduce the impact on local communities:

Many areas have imposed limits on the number of days a property can be rented out per year. Common limits include:

  • your property should be let out for at least 105 days in any one year
  • your property should be made available to book for holidays for at least 210 days each year
  • anyone staying in your property should stay no longer than 31 days and should not amount to more than 155 days in any one year

Guidelines for compliance

At Finest Stays we’re on hand to support you to ensure you’re compliant with the new regulations and that common pitfalls are avoided.

Be proactive. Staying ahead of regulatory requirements is crucial:

  • Schedule regular inspections of your holiday let so that you’re compliant with the health and safety standards
  • updating your property when needed will enhance your guests’ experience and satisfaction and gives you the opportunity to review the rental
  • keep thorough records of safety certificates and guest registrations
  • we can advise regarding local regulations and have the resources to ensure compliance
  • by letting us take care of your bookings, admin and guest communications for your holiday home, you’re free to concentrate on VAT registration and other financial aspects of your property.

It’s important that we understand the new regulations and the impact they could have on letting your holiday home. By doing so we can take a proactive and informed approach to the changes and you can ensure compliance and enhance your guests satisfaction while protecting your investment. 

Navigating Restrictions and Legislation

Noise regulations

These are quite common and put in place in quiet residential areas between the hours of 10pm and 7am. Some areas ask that the noise is monitored so that it is compliant with the restrictions

Occupancy limits

The maximum number of guests allowed to stay overnight at your property is restricted by the size of your holiday home and how many bedrooms it has. The occupancy limits are set to restrict the number of guests to avoid disturbances and to make sure that your guests safety isn’t compromised by over occupancy.

Restrictions can be put in place to prevent parties or large get togethers taking place either in your house or gardens. This again will have an impact on the noise and occupancy restrictions. 

Parking restrictions

Parking can be a particular problem for us with holiday homes in rural areas where the country village lanes are narrow and some towns have restricted permit parking.

  • if your property has designated parking for one or two cars, ensure that your guests are aware which spaces apply to your home. This will avoid any aggravation with neighbours
  • many streets have parking restrictions which your guests should be made aware of. Failing to do so can quickly cause congestion.

By providing a welcome guide that includes parking information, quiet hours related to noise, occupancy and waste disposal plus emergency contacts, guests staying in your holiday home will be well informed of any restrictions at the property.

The Role of Finest Stays in Supporting Owners

The team here at Finest Stays are on hand to offer personalised advice and assistance with letting your holiday home. We’re here to discuss any concerns you may have about the new legislation and how it will affect your holiday let. We can help you navigate the new regulations and ensure that you stay compliant and make informed decisions about your rental property. 

We know the significance of maintaining strong relationships with our owners. We prioritise open and clear communication, providing owners with regular updates on the market and booking levels. We believe in fostering a partnership with our property owners, ensuring your continued support and informed involvement throughout the entire process.

Our aim is to ensure that letting your holiday home is a straightforward and beneficial process. We keep our finger very much on the pulse and provide owners with frequent regulatory updates through our regular quarterly owner’s newsletter which provides key information and down to earth realistic advice based on this information. Our team can also facilitate the compliance audit and manage the communications with the property managers who can organise this for you. 

Frequently Asked Questions

Q: What are the new fire safety requirements for 2024?

A: The new holiday cottage rules state that you should place a smoke detector in every room. Exits should be clearly marked and you should have a fire extinguisher on each floor. If you have gas appliances in your property then a carbon monoxide alarm is mandatory.

Q: How can I ensure my holiday let complies with occupancy limits?

A: You should clearly state the number of bedrooms/beds and the maximum number of guests allowed in your property. We will ensure that this is indicated on your website listing but it should also be included in your property information file.  

Q: Is there anything I can do if I exceed the maximum rental days allowed?

A: If you exceed the number of permitted rental days you could be liable to penalties. We can help by tracking the rental of your holiday cottage and reporting back to you if this were the case.

Q: How do I handle the new tax reporting requirements for my holiday let?

A: Be transparent in your tax affairs and ensure that you’re registered with HMRC for VAT. We will have figures for your rental income (and possible expenses where applicable). You must submit your VAT quarterly to HMRC as required.

Q: Where can I find more information about the changes to holiday lets?

A: Visit HMRC to keep up to date with the new regulations and compliance guidelines or get in touch with our experienced local team here at Finest Stays – we’re here to help, just drop us an email or give us a call. 

Please get in touch if you would like a consultation to discuss listing your property with Finest Stays.

Quarry House

Join our portfolio today and experience the difference first hand.

 
All Properties
 

Join our mailing list

Access exclusive offers, discounts and promotions on the most beautiful holiday homes, plus insider guides from our South Devon experts