A simple guide to the new short-let legislation in the UK

The UK government is introducing significant changes impacting short-term rentals in England, with implications for tax, planning, fire safety and consumer protection. Here's a simple breakdown of the changes you need to be aware of.

The Furnished Holiday Let (FHL) tax regime is being abolished. Key implications: loan interest will be restricted to the basic rate of income tax; capital allowances will no longer be available for new expenditure; FHLs become eligible for replacement of domestic items relief in line with other property businesses; and FHL income will no longer count towards relevant UK earnings when maximum pension relief is calculated.

A new planning category is under discussion for short-term lets that aren't someone's primary residence. Currently serviced accommodation doesn't fit into C3 (Residential) or C1 (Hotels/Hostels), so a new C5 class is proposed for serviced accommodation and furnished holiday lets.

Under the proposed changes, you'll need planning permission from the local council before converting a property into a short-term let. For existing short-lets, grandfather rights are expected, though how they'll be awarded hasn't been announced - the industry expectation is that properties already on business rates will qualify.

You must conduct a fire risk assessment to identify hazards and plan escape routes, install working smoke alarms on each floor and in every habitable room, and fit carbon monoxide detectors if you have gas appliances or a wood-burning stove. Test alarms between every changeover.

Provide fire extinguishers and blankets in accessible locations, keep escape routes and emergency lighting clear, and make sure all furniture and furnishings comply with the Furniture and Furnishings (Fire) (Safety) Regulations 1988. Fire doors or solid doors must meet the current regulations in your part of the country.

A range of changes are coming in over the coming months and years. Stay prepared and keep an eye on the news so you don't fall foul of the changes - or let a management company like Truestays track them for you.