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The Future of Serviced Accommodation & Preparing for Government Changes · The Property Unleashed Podcast

• 0:01
  Speaker 1: Government announces new rules for short-term rentals.
• 0:04
  Speaker 1: What does that mean for us?
• 0:06
  Speaker 1: Hello, my name is Marfaith Scherrod and it's great to have you joining me here today.
• 0:22
  Speaker 1: So the government has finally come back and proposed some of the new regulations and rules that they want to bring into place for short-term rentals, otherwise known as Service Decommodation, airbnb Holiday, let's you name it.
• 0:36
  Speaker 1: We knew legislation and some guidelines and some rules was going to be coming in, because they proposed it last year, but we never really truly understood or knew what was going to be coming in.
• 0:49
  Speaker 1: So right here, right now, let's cover what we do know.
• 0:52
  Speaker 1: So the government have proposed that you will now need planning permission to rent out your property for more than 90 nights per year.
• 1:04
  Speaker 1: Okay, this law is to really clamp down on short-term rentals.
• 1:09
  Speaker 1: Now we'll say short-term rentals, it's all the same service accommodation, it's the same name.
• 1:14
  Speaker 1: The government will call it short-term rentals, because that is the proper name for it.
• 1:18
  Speaker 1: Service Decommodation is a bit more of a buzz word when it comes to that.
• 1:22
  Speaker 1: Now, the reason they're doing this is because in certain areas, particularly holiday destinations, seaside resorts a lot of people now are turning those properties into short-term rentals to get the summer trades to earn the big bucks, so to speak, because they'll earn more than they would with a vanilla by-telep.
• 1:42
  Speaker 1: Now what does that mean for us?
• 1:45
  Speaker 1: Well, that actually means that the opportunities in those areas, then, for people who are residential buyers are going to be struggling.
• 1:53
  Speaker 1: Why?
• 1:53
  Speaker 1: Because the prices in the areas are going up.
• 1:55
  Speaker 1: It's difficult for people to buy properties to live in as a residential, and the government are sick of it.
• 2:02
  Speaker 1: They want to remove it all.
• 2:03
  Speaker 1: Now, on top of that, there probably will be some rules and some regulations that they'll want to bring in, but the fact that you need planning permission to change your property from potentially being a C3 residential planning class to the new class which they haven't actually given us a name yet a lot of people are suspecting and thinking it could be a C5 class could be made more difficult if they decide to bring in Article 4 or some sort of Article 4.
• 2:37
  Speaker 1: Now, if you've watched my channels or you've watched these channels and you've heard about it in the past, article 4 means it can be very, very difficult to get planning permission to convert your property into another use.
• 2:50
  Speaker 1: So, if we take HMOs Houses of Multiple Occupation where the properties are rented out by individual rooms.
• 2:56
  Speaker 1: A lot of councils brought in Article 4 areas around the town's centres to stop people from buying residential properties and converting them into HMOs.
• 3:08
  Speaker 1: If they did do that, they had to go through planning.
• 3:11
  Speaker 1: If it was in an Article 4 area, that planning could be turned down by the council because they were saying there were too many HMOs in the area.
• 3:19
  Speaker 1: They're going to be looking at doing the same with short-term rentals.
• 3:24
  Speaker 1: Okay, so I do expect that in populated, high-density populated areas where there's a lot of short-term rentals, they will bring in sort of an Article 4 rule so that you have to go through planning, the council have to know about this and they can obviously turn you down if there's too many.
• 3:41
  Speaker 1: Now, if you look at certain seaside resorts, particularly places like Bournemouth and things like that, they've had local licence in it there.
• 3:50
  Speaker 1: They've had other restraints put in by local councils already.
• 3:55
  Speaker 1: So there's lots of different strategies and lots of different ways to do short-term rentals.
• 4:00
  Speaker 1: So of course, you can buy a residential property right here right now and still convert it into a service to accommodation short-term rental.
• 4:09
  Speaker 1: And what the government are also saying is if you are already operating, in most cases you will be granted planning permission.
• 4:16
  Speaker 1: It's really, once they've set a deadline, they've set that date in, to say, from this moment you need to go through planning to change it.
• 4:24
  Speaker 1: Those are the moments.
• 4:25
  Speaker 1: So you'll have what they call sort of grandfather rights, and a lot of people had that with their HMOs as well.
• 4:31
  Speaker 1: So the HMOs were already operating as compliant HMOs to the regulations, and that's very, very important.
• 4:38
  Speaker 1: We'll touch on that in a minute.
• 4:39
  Speaker 1: But if they were already set up, they were granted licences with grandfather rights.
• 4:44
  Speaker 1: So I've said this once and I'll say it again now is a golden time to be getting into service to accommodation.
• 4:52
  Speaker 1: If you want to build a successful service to accommodation business, you really need to be up in your game and getting out there and doing it right here and now, before this deadline comes in.
• 5:03
  Speaker 1: Now, on top of this, I can see certain requirements coming from the government as well, and this is a good thing, because we want to make sure that we're looking after people.
• 5:12
  Speaker 1: We want to make sure that our service to accommodation or short-term rentals are safer for everybody.
• 5:17
  Speaker 1: We don't want anybody getting hurt or having any problems, do we?
• 5:20
  Speaker 1: So I do believe that there will be some fire regulations that are going to really be stepped up and mandatory in all properties.
• 5:28
  Speaker 1: At the moment, you've got to do a fire check and make sure that your property is compliant, but you can do it yourself.
• 5:37
  Speaker 1: I think there's going to need to be an official check and things like fire doors, things like integrated smoke alarms you should already have, potentially, fire blankets in the kitchens and things like that Potentially fire extinguishers as well although I don't always like fire extinguishers because it actually attracts people to fight fire rather than just getting out of the way so there may be some regulations that come in and some compliances that come in with that as well.
• 6:05
  Speaker 1: Now here, we always want to make sure that we are savvy investors, that we are doing the right things.
• 6:12
  Speaker 1: People will still try and do this strategy without doing it properly, but they run the risk of being caught shut down.
• 6:20
  Speaker 1: There's also going to be a lot of amateurs out there, right here right now, that are very, very scared of the planning of the new regulations, of the fact that they may have to put money into these properties to keep it going.
• 6:32
  Speaker 1: And remember, if we're building properties out, we're doing HMOs, we're doing service accommodation, we want to be building out a business.
• 6:39
  Speaker 1: Okay, whether that's a business that you manage yourself or you outsource the management, but you still want to be treating yourself as a business and doing the right things.
• 6:48
  Speaker 1: Now speaking about the right things, if you have any issues or problems or you'd like to find out more about service accommodation, hmos and how you can use those strategies, and potentially the rent-to-rent strategy as well, then do check out the property Unleashedcom.
• 7:02
  Speaker 1: We have some free tools and resources there that can help you.
• 7:06
  Speaker 1: Short-term rentals can be a very, very lucrative strategy and, as I say, you want to be setting yourself up as a business, so the smart, savvy people will be budgeting ready for the regulations to make sure that their properties are compliant.
• 7:19
  Speaker 1: Now there are a few other ways that you can do short-term rentals.
• 7:23
  Speaker 1: Of course, you can look to purchase old B and Bs, which will probably be already a C1 class, but that is the case.
• 7:33
  Speaker 1: You will not have to have planning permission to change anything.
• 7:36
  Speaker 1: In most cases, they're already set up.
• 7:38
  Speaker 1: Now why would somebody sell a B and B?
• 7:40
  Speaker 1: Well, sometimes they're tired.
• 7:42
  Speaker 1: They've been doing it for years.
• 7:43
  Speaker 1: It can be very, very hard work running something like that if you've been doing it your whole life and you don't know any better and what a lot of people are doing now, and you may very well have heard of apart hotels.
• 7:56
  Speaker 1: Now, apart hotels can be brilliant, particularly if you have keyless apart hotels.
• 8:01
  Speaker 1: So you have door locks, you have keypads.
• 8:03
  Speaker 1: They basically can run themselves remotely, so you don't have to pay staff to be there.
• 8:09
  Speaker 1: Yes, cleaners will go in and clean, but that's not going to be you.
• 8:12
  Speaker 1: You would employ a company to come in there and clean those out.
• 8:15
  Speaker 1: They're very much run like a hotel, but without people or boots on the ground.
• 8:19
  Speaker 1: Now you can have a concierge, you can have people working there, but to keep your overheads down a lot of the time, these apart hotels can be brilliant and, of course, you can have more rooms as well.
• 8:29
  Speaker 1: So you may have a B&B with maybe eight rooms.
• 8:32
  Speaker 1: You may be able to.
• 8:34
  Speaker 1: Obviously, looking at the layout of the property and stuff, you may be able to get 10, maybe 13, 14 rooms because, being a short-term rental B&B C1 class, there are no minimum room sizes when you do this sort of thing.
• 8:48
  Speaker 1: Yes, you want to make sure that they are big enough to be practical, but you can end up putting more rooms into properties and then letting them out on short-term rental.
• 8:59
  Speaker 1: Some of them can be called micro units and all of those great things.
• 9:03
  Speaker 1: So, apart hotel is a great one, and if you're going for existing commercial units or you're going for your B&Bs, you see one class which is the same as a hotel would be classed in the planning department.
• 9:14
  Speaker 1: Then you can use this.
• 9:17
  Speaker 1: But we've got to look at what is coming our way and, as I say, some compliances are coming.
• 9:21
  Speaker 1: Never a bad thing.
• 9:23
  Speaker 1: As I say, we want to be making sure that our properties are nice and safe.
• 9:26
  Speaker 1: If you're already set up and you're already operating as a service accommodation short-term rental provider, you should be given the opportunity to get the planning that you need by a grandfather rights, of course, as well.
• 9:39
  Speaker 1: And I also think that there will be some sort of register, some sort of licensing, to be put in place for the areas as well.
• 9:47
  Speaker 1: Now, if you know about HMOs, you know that you have to apply for a license and then you have, in that area, the local council holds on to the details of all of the homeowners or all of the landlords, and it's called an HMO register.
• 10:01
  Speaker 1: Now, what my business actually does because we do rent to rent a lot is we actually mark it out to the HMO owners and ask them if we can rent their property from them.
• 10:12
  Speaker 1: So they are providing a service and we're looking to be their customer for want of a better word and that is how we operate there.
• 10:19
  Speaker 1: Now they do the same for service accommodation, short-term rentals.
• 10:23
  Speaker 1: You will have, and still have, a lot of people managing their own short-term rentals, their own service accommodation units.
• 10:31
  Speaker 1: Now what happens?
• 10:32
  Speaker 1: Over time, people do become tired.
• 10:35
  Speaker 1: So for us, we've already set up systems in place.
• 10:39
  Speaker 1: We can actually probably, eventually, maybe even be able to market out to these landlords, to these operators, and see if we can help them by offering them a service so that they can remove the hassle, as we always say, and go about their business.
• 10:56
  Speaker 1: So again, this may be another great source and a great way for us to be able to market out there, for us to be able to find potential properties that, a, we can buy or, b, we can work with the landlords and see if we've got the service that can really really help them.
• 11:12
  Speaker 1: I don't look at this as a bad thing.
• 11:14
  Speaker 1: Yes, it can make things a little bit more difficult, but if you're doing rent to SA, rent to rent SA or anything like that.
• 11:21
  Speaker 1: You really should be telling the landlords or the agents that you're working with exactly what you're doing anyway.
• 11:27
  Speaker 1: Why?
• 11:27
  Speaker 1: Because it's just good practice.
• 11:29
  Speaker 1: So if you can show the benefits to a landlord and they can go for planning and get it all approved in their area, great stuff Also.
• 11:38
  Speaker 1: Well, not 100% sure right now whether they're going to mark off.
• 11:42
  Speaker 1: If you look at maps and council maps, you can see article four areas are normally mapped out around the town centre and sometimes you can get very close to what would be the town centre, but it's not classed as article four, so you've got more chance of getting planning.
• 11:55
  Speaker 1: That could be the case as well here, because they probably will have to put some sort of guidelines in place unless they just say it's across the country.
• 12:04
  Speaker 1: We've already seen a lot of these regulations coming in in Wales, and particularly in Scotland, which is very, very strict as well.
• 12:12
  Speaker 1: So it will be interesting to see whether or not we get a guideline or whether or not they just put it out there and just say that that is basically the norm.
• 12:19
  Speaker 1: We've got to wait and see on those things.
• 12:21
  Speaker 1: Obviously, governments are a law onto themselves, and rightly so.
• 12:24
  Speaker 1: So we will react and we will set up our businesses in the right manner as they change things.
• 12:31
  Speaker 1: People say to me it's now a great time to be getting into service accommodation.
• 12:34
  Speaker 1: Listen, now's a great time to be getting into property.
• 12:37
  Speaker 1: Okay, you really want to be focusing and knowing what you're doing.
• 12:41
  Speaker 1: So make sure that you understand that and you do know what you're doing.
• 12:45
  Speaker 1: And, of course, if we can help you with that, we have the ultimate service accommodation business builder training program that can help you every step of the way to building a successful service accommodation business, whether that's in rent to rent, management, joint ventures or you own your own properties.
• 13:04
  Speaker 1: We have the coaching and support and all the tools and resources you need to get the results that you want.
• 13:10
  Speaker 1: But act quickly, because right now it is easier to get out there and build this business up than it will be potentially come the summer.
• 13:18
  Speaker 1: You'll still be able to do it in the summer, but we're going to have some more legislations to get ourselves around and I'd say around.
• 13:25
  Speaker 1: We're not going to cut any corners.
• 13:26
  Speaker 1: We're not going to go around the back, you know, go and sneak in the back door or anything like that, but we will have more compliances, more red tape to get through.
• 13:34
  Speaker 1: So it could be a little bit trickier to do, but it will still be able to be done.
• 13:39
  Speaker 1: Why?
• 13:39
  Speaker 1: Because, hey, we can still do the same with HMOs.
• 13:43
  Speaker 1: I have an HMO rent to rent business.
• 13:45
  Speaker 1: There's lots of red tape, there's lots of compliances there.
• 13:49
  Speaker 1: But I tend to go and I try and work with the people who have already set those up, who have already gone through the red tape, who have already done all of the work for me.
• 13:58
  Speaker 1: I go in there and then I give them what they want, which is complete hassle free.
• 14:03
  Speaker 1: And, of course, if we're looking to buy the properties and things like that as well, it'll be very, very interesting to see what a normal residential property on a street sells for and an active with planning service accommodation unit sells for as well.
• 14:17
  Speaker 1: Because one's a business and one's a residential.
• 14:20
  Speaker 1: That business should surely put the value up on that property, okay, because it is a self-contained unit.
• 14:26
  Speaker 1: So it's going to be very, very interesting.
• 14:29
  Speaker 1: So I don't think we should really think about getting our nose bent out of joint with these things.
• 14:35
  Speaker 1: These things always happen in business.
• 14:37
  Speaker 1: Things change, things never stay the same.
• 14:38
  Speaker 1: So we've just got to react to it.
• 14:40
  Speaker 1: But Michael Grover has said himself, and I shall quote we know short-term lets can be helpful to the tourist economy, but we are now giving councils the tools to bring them under control so that local people can rent these homes as well, and companies like Airbnb are also welcoming the announcement.
• 14:59
  Speaker 1: I actually think it is quite a good thing, because it is a bit of the wild west out there at the moment and I don't want to see anybody get her.
• 15:07
  Speaker 1: I don't want to see anybody you know, doing anything that they shouldn't be doing.
• 15:11
  Speaker 1: If I go and stay in an Airbnb, I'd love to know that it's got the local you know safety standards that it should have, that it's set up in the right manner and, of course, if you do that, there should be some sort of council seal of approval or some sort of government seal of approval to say they've got this stamp, because they tick all of these boxes and that should be something that you can advertise as well.
• 15:33
  Speaker 1: So when you see on Airbnb or any, or bookingcom or any anywhere else, people trying to let their properties that haven't got, so to speak, this stamp of approval, you know not to go and stay in those properties, stay the savvy property professional that we always are.
• 15:49
  Speaker 1: I hope this episode has helped you.
• 15:50
  Speaker 1: I hope it's given you a bit of food for thought.
• 15:52
  Speaker 1: It's not scheduling in any way, shape or form.
• 15:53
  Speaker 1: As I say, power is knowledge.
• 15:55
  Speaker 1: You need to know what you're doing.
• 15:57
  Speaker 1: Once you do and you keep yourself on the inside with the people that are doing this, with the people who are actively doing this, then you put yourself in the right place.
• 16:05
  Speaker 1: And, of course, if you need any further help with this, then do check out the propertyunleashedcom free tools and resources.
• 16:13
  Speaker 1: We've also got the property unleash podcast so you can listen to these episodes as well.
• 16:16
  Speaker 1: And, of course, if you've enjoyed this, do feel free to subscribe and reach out to me on social media channels Facebook, linkedin, instagram, tiktok, you name it.
• 16:25
  Speaker 1: I'm on all of those.
• 16:26
  Speaker 1: I'm more than happy to help and point in the right direction if I can.
• 16:29
  Speaker 1: And, as I say, we've got some free guides, got free training.
• 16:32
  Speaker 1: Keep yourself in the know.
• 16:34
  Speaker 1: If you're just starting out, grab hold of those and go and learn some more.
• 16:39
  Speaker 1: I look forward to you joining me very soon.
• 16:41
  Speaker 1: You take care and bye for now.