My Lords, I am not an expert in this area, but following a discussion with an entrepreneur who is active in this field and behaving responsibly and who has developed a successful business in response to a real market, I thought it important that an alternative case be put. Over the years, I have often heard a strong case from the public sector as to why it would be unhelpful for a particular change to happen. I have heard attempts to hold the sea back before, but it has often proved impossible in the end.
Change happens. As a social entrepreneur and innovator I have certainly been told by the public sector on numerous occasion that, “the sky will fall in” if such and such a change should happen. Having usually stayed the course, I noticed that, in reality, it never did and a new, often positive reality emerged.
The noble Lord, Lord Fowler, gave some excellent illustrations of this phenomenon, and attempts in the past to hold back business development, in his Second Reading speech. I shall articulate an alternative scenario to that painted by colleagues. I have heard considerable opposition to this change and concern over the unintended consequences that may arise as a result. However, I have yet to hear enough focus on the benefits of this reform, which in many people’s eyes is a sensible and forward-thinking piece of policymaking. It is these benefits that I shall focus on.
First, this reform will deliver a more optimal use of space and existing assets. With such well-documented pressure on our housing capacity, surely it makes sense to make better use of the residential property that we already have and to allow our properties not to lie empty for short periods when owners are away. I declare an interest as someone who lets out rooms in my London home. Secondly, a system which no longer makes people feel fearful of criminal sanction simply for renting out their residence when they are away will mean that families, many of whom are in need of additional income, will be free to tap into an additional revenue stream. Much of this revenue will be taxed and will ultimately boost revenue for the Exchequer to spend as it chooses.
Thirdly, it is evident that increasing the variety and stock of locations for tourists to stay will not only boost tourism in the capital, but will give a boost to local businesses that will benefit from this new mode of travel. This extra tourist footfall has the potential to reach parts of our economy that tourist dollars have previously never reached. Furthermore, when tourists decide to stay in people’s homes rather than in hotels, they tend to spend their money in local businesses, local restaurants and local museums. Finally, it should be pointed out that the costs for a family wanting to stay in a hotel in London are incredibly high and many people are simply priced out of a trip to our capital city. Short-term holiday lets provide travellers, especially families, with more choice and often more suitable properties in which to reside while on holiday.
We must be clear that the internet has fundamentally changed the way in which people live, work and travel. Either we decide to embrace this shift in our policy-making and our regulation or we will be left behind, as other cities embrace what is increasingly a preferred way to travel. The emergence of platforms such as Onefinestay, which has been mentioned and which enables people to rent out their residence safely and securely on a short-term basis when they are not at home, is something that we should embrace and not hinder.
4.30 pm
Regulation in this area has evidently not kept pace with technological and social advance. We now have an opportunity to put in place a sensible framework which puts London at the centre of a new and exciting
phenomenon: what many people refer to as the sharing economy. This is not about wholesale deregulation or allowing speculators to buy up property for their individual profit. We must be clear that this is not what the Government are proposing, as I understand it. Appropriate safeguards should be put in place in any secondary legislation to ensure that buy-to-let investors cannot choose to turn homes into businesses. However, individuals should have the basic right to let their residences for short periods if circumstances warrant it.
London is currently the only place in the country, I understand, which puts such restrictions on this activity. While London is clearly a special case, the time has come for proportionate reform which would mean that those seeking to rent out their residence on a short-term basis would not have to apply for planning permission as if they were commercial premises, such as a shop or bar. This activity is clearly already taking place in London and elsewhere, so either we put in place a sensible system to regulate it properly and proportionately or we risk an unregulated and underground market—with all the associated risks.