Legislation Changes for Holiday Lets: What We Know so Far

You may have seen in the news that the government is planning to make some changes to legislation for holiday lets. There is a fair amount of misinformation and confusion surrounding this. Below we detangle it all and provide what we know so far…

Furnished Holiday Lets

A holiday let is just a property that is let for holiday purposes. This is separate from a Furnished Holiday Let, which is a specific type of property classification. A property can (and should as it is technically mandatory) register as a Furnished Holiday Let if it is let commercially for 105 days per year. 

There are many benefits to this but the key ones are:

The Furnished Holiday Let (FHL) property classification is scheduled to end at the start of April 2025. We don’t know what, if anything, will replace it yet. It is expected to lead to a shift in ownership of holiday lets through limited companies to benefit for tax benefits.

New Planning Permission Legislation

The government is planning on giving councils the power to require holiday lets to obtain planning permission. The legislative changes are expected to come into effect in the summer, but the implementation is a lengthy process of reviews, consultations etc. Our industry contact with links to the government estimated this would take 1.5 to 2 years from April 2024.

Key points:

The Impact

Changing planning from a residential property to a holiday let will likely be very difficult, but changing from a holiday let to a residential property will be the opposite. Therefore, the supply of holiday lets on the market will gradually fall over time – this is the intention of the legislation. However, the demand for holiday properties is unlikely to change by the same degree, resulting in a possible increase in the price of properties with holiday let planning.