Is Rent To SA In Trouble?

The government have commenced proceedings to impose further restrictions on the property market, but this time it’s the SA (Serviced Accommodation) or short-let/AirBnB investors who’ll feel the pinch.

On the 12th April, the government launched a consultation with the intention to implement the requirement for mandatory planning permission to be obtained for those investors who use the short-term let/SA model. The idea being that an additional class will be created for such use, maybe a C5 for example, in addition to the requirement for a new permitted development right for the change of use.

These changes were flirted with during the governments Levelling Up white paper last year and now seem to be taking form. We’ve already seen the removal of PD (Permitted Development) Rights for HMO’s and now this step is proof that it won’t be long before every Landlord or operator of SA will be on a register with the property requiring a licence.

It appears that far too many local borough councils have been flooded with complaints about anti-social behaviour with short-term lets and a lack of properties within the PRS (Private Rented Sector), which has naturally created an increase in rental prices and a serious lack of supply.

Our concern here is that anyone who’s operating a property as a R2SA (Rent to Serviced Accommodation) will suffer greatly as a result of the changes and could possibly see their contract coming to a swift end. The main points of consideration here are: Who will apply and pay for everything and how will that ultimately affect income? Now, it’s not going to completely be doom and gloom, however we would encourage anybody doing a R2SA deal to carefully look at their exit strategies now.

This was written by our lettings partner, Peter baker who is from UKRR. Established in 2011, UKRR company Director launched the business with a handful of local Landlords on his books and his own small property portfolio. Today, they employ 17 members of staff, successfully manage 600+ tenancies and offer off-market residential sales to investor Landlords.

He gives our franchisees guidance on the issues they will encounter during their property journey. You can find out more about UKRR here.

Contact our team today to find out more about our franchisee opportunities.