back to article Legalising London's bed-hopping economy is POINTLESS

There is no evidence to support claims that London residents have been fined for using sites such as Airbnb, despite moves by the government to push through headline-grabbing "sharing economy" legislation, El Reg can reveal. Last month, the government announced it would introduce an amendment to allow London residents to use …

  1. frank ly

    Rules and Regulations

    "In the rest of the country, residents are able to let out their homes for short periods."

    Fourteen years ago, when I rented out a room to a long distance commuting colleague for a few months, I found out that I was allowed to make £5,000 a year in this way with no liability for tax on it. Is it a different set of rules for a B&B type arrangement via a third party organisation?

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  2. Fihart

    To hell with the neighbours !!

    The original legislation protected neighbours from landlords using flats as ad hoc hotels.

    Some years ago a neighbouring property owner did a deal with a tour operator who brought in coachloads of tourists from East Europe prepared to share rooms full of bunk beds. Result, endless noise of 25 or so people tramping up and down stairs, clearly audible from my bedroom. These properties were built to house between four and, perhaps, nine persons.

    I failed to persuade authorities to intervene on fire safety grounds. Eventually, local authority planning enforcement officer raided the place. Hopefully, regardless of "sharing" legislation changes -- planning law governing "change of use" from (normal) residential to commercial still apply.

    Also, most residential rental agreements bar subletting the whole of the property -- if you suffer from "sharing" neighbour, contact the landlord, who may then evict the offending tenant.

    1. LucreLout

      Re: To hell with the neighbours !!

      if you suffer from "sharing" neighbour, contact the landlord, who may then evict the offending tenant.

      In London this will become far more common. I recently became aware of a new practice known as Rent To Let (RTL) in which the tennant rents out a property then sublets the crap out of it and pockets the difference. Some people are apparently coining itin by renting anything up to 10 properties all of which they sublet. Essentially BTL for the priced out generation.

      Given the high number of absentee landlords (my last landlord was living in America, the one before South Africa) letting through estate agencies, and estate agents well known love of an easy life, clamping down on this practice may need to become a higher priority for local councils.

      1. Dan 55 Silver badge

        Re: To hell with the neighbours !!

        I thought the standard rental contracts banned subletting anyway.

        1. Gordon 10
          Thumb Up

          Re: To hell with the neighbours !!

          I thought the standard rental contracts banned subletting anyway.

          As do most buy to let mortgages. One of my friends years ago was booted out of his rented flat at short notice as there was some dodgy sub-letting going on that the mortgage co. didn't approve of.

      2. Anonymous Coward
        Anonymous Coward

        Re: Rent to Let...

        Rent to Let is being promoted by UK (offshore) banks. Expats receive frequent information about this with the offer being that they can have up to 10 Rent to Let loans funded by those banks.

      3. YetAnotherLocksmith Silver badge

        Re: To hell with the neighbours !!

        Sounds like a plan.

        Anyone want to loan me £1 million to buy a house? No? Ok, I'll sublet.

        It's rather crafty.

      4. Destroy All Monsters Silver badge
        Facepalm

        Still waiting for volume 4 of "Das Kapital" btw

        clamping down on this practice may need to become a higher priority for local councils

        Oh no people making money off paying customers, can't have that! Something must be DONE!

        1. Ilmarinen
          Thumb Up

          Re: Still waiting for volume 4 of "Das Kapital" btw

          Well said Mr Monsters.

          There seems no limit to the desire of prod-nose parasites to control and regulate what people can and can't do with their own property. A lot more less of it would be a jolly good thing (TM).

        2. LucreLout
          FAIL

          Re: Still waiting for volume 4 of "Das Kapital" btw

          Oh no people making money off paying customers, can't have that! Something must be DONE!

          Epic fail, no messing.

          The point you missed is that this isn't people doing whatever they want with their own property. RTL is renting someone elses property and renting it out to more people such that the total rent you gain is less than the rent you pay. Doubtlessly doing so without paying the required taxes and HMO inspections.

          BTL I have no problem with, the landlord owns the house, so it's theirs to do as they please.

          RTL only works because absentee landlords don't/wont/can't inspect the property (usually due to living abroad) and letting agents don't care so long as they make their cut each month.

  3. The Mole

    Interesting logic

    The logic in the article seems to be that because this law isn't currently being enforced then there is no reason to repeal the law. This seems backwards, if the law isn't currently being enforced then councils should either be encouraged to actually enforce it, or the law should be repealed. Having unenforced laws hanging around the statute books are among the worst types of laws, they allow for malicious prosecutions and penalise the people who try to actually be law abiding - if it isn't being enforced and you are ignorant of it then you are (probably) fine, if you aren't ignorant of it and law abiding you loose out.

    1. oddie

      Re: Interesting logic

      I agree, the idea of having laws around that you won't be arrested/prosecuted for breaking, unless someone takes a dislike to you, or someone needs to get to you for other related reasons, which also happen to fall under it, is not consistent with a democratic society.

      If the law isn't being used, or used only as not-intended, simply remove it.

      If it WAS used very sparingly to targed other problems (such as closing down the use of domestic dwellings for hotels) then specific laws targeting that problem should be brought in.

      Is this really that hard? This seems like exactly the sort of thing parliament exists to do?

      With the huge amounts of outdated laws and regulations in the UK I think a new rule should be put in place: no NEW parliament should be allowed to pass any laws until they had had a week of repealing old useless laws first.

      1. Anonymous Coward
        Anonymous Coward

        Re: Interesting logic

        Yeh, good idea.

        Better if a week was spent before that "repealing" politicians ;-)

        1. Ken Hagan Gold badge

          Re: Interesting logic

          "Better if a week was spent before that "repealing" politicians ;-)"

          That's actually going to happen, as I understand it. The next round of boundary changes will reduce the number of seats in the Commons. I'm not sure whether it reduces it to a level where all MPs can physically fit into the chamber, mind, so it it still worth getting up early to reserve your seat.

    2. W T Riker

      Re: Interesting logic

      Ah, but it does get the Government some headlines for fixing a problem (that isn't a problem, because they don't enforce the current legislation).

    3. Ian K

      Re: Interesting logic

      Agreed - this is also contrary to the usual Reg stance when overzealous laws are proposed on the security front. There they'll quite rightly refuse to accept arguments like "this law could be used in bad ways, but it's OK - if we bring it in you can trust us to only use it when we should".

      Here they're saying "this is a bad law, that can only be used in bad ways, but no need to fuss or repeal it because they haven't used it yet".

      Odd.

      1. Anonymous Coward
        Anonymous Coward

        Re: Interesting logic

        The problem will be that the actual legislation covers a range of possible circumstances which would need to be carefully unpicked so that only the clauses relevant to this case were repealed. However government doesn't work like that whether making or unmaking laws, so the whole thing will end up being dropped from the statute books regardless of any collateral damage to the public.

    4. John Brown (no body) Silver badge

      Re: Interesting logic

      "Having unenforced laws hanging around the statute books are among the worst types of laws, they allow for malicious prosecutions and penalise the people who try to actually be law abiding"

      Part of the problem is that there many laws like this. People know they are not enforced and so ignore them. This encourages a mindset to ignore other laws too. Just look at the antics of many road users to see the results. Not only do they know they are unlikely to be caught, but they probably have experience of ignoring laws and getting away with it right under the nose of Police.

    5. Anonymous Coward
      Anonymous Coward

      Re: Interesting logic

      And fewer words better.

  4. dogged

    Hmmm.

    I expect this will be clamped down on fairly quickly. Those laws will start being enforced.

    Why?

    Because of statistics. Among the population in general, around 2% are housing landlords. Among MPs, over 30% are housing landlords. Mainly in London. They buy the house, let it, expense the mortgage, nice little earner for our upstanding representatives.

    More lets will reduce the rents and they won't want that.

  5. Jamie Jones Silver badge
    Facepalm

    Thanks for the article photo...

    ... it helped me understand what a bed is, and what it's used for.

    The article was enriched tremendously as a result.

  6. ThePascalLine

    The tradition of offering bed and breakfast in London homes is somewhat older than the fatuous marketing material emanating from offshore in Dublin 4 would have the gullible believe. For the genteel B+B ladies of Chelsea, Knightsbridge and elsewhere in central (and Zone 2) London, good manners and discretion were paramount. Check-ins before 8am and after 10pm were out of the question, particularly after the white heat of technology introduced those awful trolley portmanteaus that make such a vulgar noise when dragged along the cobbles of one's mews, outraging the local baronets and inviting a Notice to Quit on Grosvenor or Cadogan-headed vellum. As long as the proprieties were observed, the "sharing economy" – goodness, what daring new ideas people do come up with these days! worked rather well, and estate factors turned a blind eye.

    Now, it's a free-for-all, with central London a particular hot spot for short lets, but Zone 2 also buzzing, particularly with apartment and studio lets. The old guard of Marylebone, Fitzrovia and Covent Garden are highly pissed off, but there aren't enough of them left to make a difference any more; City and foreign property investment has changed the face of central London, and you can be sure those assets are going to be worked for all they're worth.

    This is a winner either way for Pickles and chums, as incoming tourists to London (stats currently on the up) can afford to stay centrally and spend their cash in the caffs, shops, theatres and pubs, and the property owners and estate agents and B+B websites and scooter-boy concierges all collect their cut. Hotel chains are allowed to compete by creating cheaper mini-mes on tiny city centre footprints, and Zone 2 property owners with house space to spare get to earn the cash to pay for the kids' astronomical school fees. Splendid idea, Belinda! Not convincing enough? How about AirBnB’s claim back in early 2014, that it was generating £502m in economic activity in the UK, and supporting 11,629 jobs? The government has no idea how to regenerate real industries that make real stuff, so to them, this flow of parasitical capital – so disruptive! – looks like an excellent wheeze. No way do they want nitpicking local councils relieving themselves in the soup.

    The cash-strapped councils themselves, previously unbothered by traditional, low-key B+B homes, have been unable to keep up with the speed of the change, their planning officers' idea of regulating B+B being more about fire regulations and potential overcrowding in HMOs (houses in multiple occupation) than apartment blocks full of partying tourists. You're renting, and sub-letting? By the time the council catches up with you, you'll be minted anyway, possibly by even enough to get yourself a mortgage: evict away and roll on the next customer! Housing association? The new websites aren't fussy, and see above for the risk vs profit factor. Westminster is livid, but as it's so skint that the most under-the-cosh planning staff in the country are currently being re-interviewed for their own jobs, it's toothless. So no policies, and no fines. Same in LA, NY, San Francisco, and it will be interesting to see how Asia – presumably to be the source lode for that projected $1bn pa turnover, – reacts.

    If the owner of the property happens to be resident (rare, these days) they can also claim tax relief of £4,250 pa under the Rent-A-Room scheme. (Now, we are all claiming honestly, aren't we, that we live under the same roof as our esteemed guests? All the time? Of course we are.) The only remaining snags are insurance and mortgage regulations, but a good selection of underwriters have the first pretty much covered for home-letters using the big websites, and why would the banks want to jeopardise the income streams being sustained by such a mini property boom? Sleeping dogs etc.

    In the short term, then, all looks rosy, provided the private equity (a rumoured $800million for AirBnB up to the start of 2015) keeps rolling in. Just make the cash while the concept’s hot, keep talking it up, and whatever you do, don’t mention the profit margins….

  7. Anonymous Coward
    Anonymous Coward

    Sharing economy.. pmsl

    I've just been reading how this new found support for resource sharing will not extent to anyone (un)fortunate enough to be living in social housing. The reason being that they benefit from government subsidy? Leaving aside how that's a massive myth (local authorities paid off their debt for house building years ago) its also very revealing of the underlying motive. The subsidy the taxpayer has provided to keep interest rates low and mortgages super cheap, not to mention the various homebuy schemes dwarfs social housing subsidy thousands of times over.. People in social housing are actually subsidising mortgages which helps keep property prices high.

    My point being.. this is another cynical attempt to help prop up house prices and high rents.. without subletting, how are people to afford them?

  8. esucmn

    Local goverment

    "We are worried about the lack of consultation on these proposals, and the results from the recent survey undertaken by London Councils show that the move is not really what many London local authorities want."

    Bugger what the people might or might not want - Local Government in a nutshell.

    "I do not think for a second that [fining people] is what local authorities are doing,"

    But they bloody well will be now that someone's told them they can. More money to piss away on things *they* want!

  9. Senshi
    Thumb Down

    It's currently illegal, but no one's been charged (supposedly), so let's just keep it illegal? I don't see anything wrong with trying update laws for the internet era. Is the 'author' recommending that people continue to break the law?

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