Proposed Future C5 Use Class for Short-Term Letting Accommodation
Short-term holiday lets have become an increasingly prominent part of the housing market, particularly in the South West where tourism is a major economic driver. Yet the largely unregulated growth of this sector has raised concerns about housing availability and affordability for local residents. In response, the Government has proposed the introduction of a new Use Class C5, alongside a national registration framework, to give councils greater control over short-term lettings. These measures aim to enable improved monitoring and allow local authorities to impose restrictions where necessary, while maintaining the economic benefits tourism brings to regional communities.
Planning Implications and Article 4 Directions
Use Class C5 will cover residential properties used as short-term lets or serviced accommodation, distinct from standard homes (C3) and hotels (C1). Under the proposal, properties currently operating as short-term lets will be automatically reclassified as C5. A permitted development right will allow changes between C3 and C5 without planning consent unless a local authority restricts this through an Article 4 direction.
Local authorities may use Article 4 directions to remove permitted development rights in areas under housing pressure. In many popular South West tourist towns and rural areas, changes from C3 to C5 could require full planning permission to protect permanent housing stock, requiring consideration of a number of issues such as:
- Potential noise and disturbance arising from the use of the property.
- Impact on highways and parking.
- Impact of any physical alterations on the character and appearance of the building and street.
- The temporary and transient nature of occupancy.
Small-scale letting of a primary residence (e.g. up to 30, 60, or 90 nights a year) may remain within Use Class C3. The likely threshold is 90 nights, reflecting the current rules in Greater London.
National Registration Scheme
Alongside the C5 Use Class, a mandatory national register will require all hosts to provide:
- Property address and ownership details
- Type of let (whole or part)
- Number of nights let annually
The scheme aims to give councils better oversight and enable enforcement of planning rules and safety standards. While full licensing is not currently proposed, the register may involve spot checks and light-touch compliance measures.
This will be particularly relevant in South West communities with high concentrations of holiday lets, where councils often face challenges in monitoring the true scale of short-term letting activity.
Local Concerns and Responses
Local authorities and residents have raised concerns that automatic reclassification to C5 could make it easier for homes to be converted into holiday lets, exacerbating housing shortages. The Local Government Association (LGA) supports the introduction of C5 but argues councils should have baseline powers to require planning permission for short-term lets without relying solely on Article 4 directions. Meanwhile, others have raised concerns the planning reforms could negatively impact the tourism industry.
What Should Hosts and Investors Do?
Implementation of Use Class C5 and the national registration scheme was initially expected in summer 2024, however, it is still pending secondary legislation, with no confirmed commencement date. In the meantime, hosts and investors should consider taking the following preparatory actions to stay ahead of these upcoming changes:
- Monitor local planning policy, especially in South West locations considering Article 4 restrictions.
- Prepare for registration, collating ownership details and compliance certificates.
- Understand exemptions for letting main residences within the allowed annual night cap.
- Factor in planning risks when acquiring or converting properties for short-term use.
- Review portfolio strategies to assess how upcoming compliance costs (such as registration fees or safety upgrades) or potential occupancy limits could affect rental income and overall returns.
How Vickery Holman Can Help
The upcoming proposed C5 Use Class and national registration framework mark a decisive turn toward regulation of England’s short-term let market. In the South West, where tourism is vital, but housing is scarce, these reforms will provide councils with sharper tools while providing operators with clear guidance.
As one of the South West’s leading property consultancies, Vickery Holman combines regional insight with full-service expertise in development, valuation and building surveying. Whether you are a private landlord, institutional investor or developer, we can provide tailored, practical advice to keep you ahead of the C5 reforms and maximise your short-term let assets’ performance.
Please talk to our Development Consultancy team or our Valuation team for more advice.
