Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.
Short-Term Lets Expansion Sparks Rental Supply Debate
The number of short-term lets in England and Wales continues to rise, raising concerns about the impact on the supply of homes available to long-term renters. Latest data from the Office for National Statistics (ONS) shows further expansion of the sector, highlighting its growing role in tourism and local economies.
Guest nights in UK short-term lets increased by 11.5% in 2025 to 100.9 million, up from 90.5 million the previous year. Wales saw the strongest growth among the home nations, with guest nights rising by 17.4%. The North East recorded the largest regional increase at 22.2%. Domestic visitors made up a larger share of stays, accounting for 67.2% of all guest nights. Among international visitors, only Germany saw growth, with guest nights up by 8.5%, while visits from the US, France, and Asian markets declined.
Industry figures have warned that the increasing use of residential properties for short-term accommodation may be reducing the stock of homes available in the private rented sector. With rental supply already under pressure in many areas, there are concerns that more properties being converted to holiday lets could further limit housing choice for tenants and add to affordability challenges in some local markets.
The figures contribute to the ongoing debate about how to balance the economic benefits of short-term letting with the need to maintain an adequate supply of homes for long-term residents. Nathan Emerson, CEO at Propertymark, highlighted the need for local authorities to have access to robust data and appropriate powers to address imbalances where short-term lets are affecting housing supply.
Government Response and Potential Reforms
The government is considering giving councils in England additional powers to address the growth of short-term lets and second homes. Housing minister Matthew Pennycook stated that ministers recognise high concentrations of short-term lets and second homes can affect both the availability and affordability of housing for local residents.
Councils currently have the ability to charge a council tax premium of up to 100% on second homes. Ministers are also progressing plans for a visitor levy in England, which would allow strategic authorities to raise additional funds from overnight stays. Additionally, operators of short-term lets will be required to join a mandatory registration scheme under forthcoming reforms.
Source: Property Industry Eye