In 2025, cities across the United Kingdom are ramping up regulations on Airbnb-style short-term rentals as they grapple with housing shortages and the lasting impacts of the pandemic on tourism.
These developments are important because they reflect the delicate balance policymakers must strike between supporting local economies driven by tourism and protecting the availability and affordability of housing for residents. SmartMove.us says the rise in short-term rentals has transformed many neighbourhoods, driving up rents and reducing long-term housing stock, while also generating vital income for hosts and local businesses. This article explores how these UK cities are addressing the crisis.
London
In 2025, London enforces a strict 90-day annual limit on short-term rentals for entire homes. Hosts exceeding this threshold must obtain formal planning permission, a rule designed to curb the loss of long-term rental stock to the short-term market. Enforcement efforts have ramped up, with local councils issuing fines to hosts who circumvent the rules, signaling a determined effort to protect London’s rental market amid soaring housing demand.
Other Cities Following Suit
Edinburgh
Edinburgh introduced a city-wide tourist tax in 2024 on overnight stays, including those in short-term rentals, aimed at funding public services strained by mass tourism. The council expects the tax to generate between £45 million and £50 million per year by 2028 or 2029. Alongside this, the city council launched a crackdown on unlicensed short-term lets in early 2025, with several high-profile prosecutions for operating without appropriate licenses. The measures reflect Edinburgh’s dual focus on sustaining tourism income while addressing residents’ concerns about housing availability and neighbourhood disruption.
Brighton
Brighton requires hosts to obtain planning permission for short-term rentals and mandates compliance with health and safety standards. In 2025, Brighton City Council increased enforcement actions, targeting unlicensed properties with fines and forced closures. Local community groups have called for further reforms to protect affordable housing.
Oxford
Oxford has taken a strong stance against unauthorised short-term rentals, culminating in the closure of notable listings such as the controversial “Shark House” in late 2024. The city council cited breaches of planning permissions and licensing requirements, marking one of the highest-profile enforcement cases in the region. Oxford continues to review its short-term rental policies with a focus on protecting student housing and residential communities from displacement, with consultation processes underway for more comprehensive controls in 2025.
Cornwall
In Cornwall, local MPs and councils have advocated for stricter regulations on holiday lets, responding to mounting concerns over the impact of second homes and short-term rentals on local affordability. Proposals pushed forward in early 2025 include mandatory planning permission before converting properties into short-term lets and improved data sharing between rental platforms and authorities. Cornwall’s tourism-dependent economy complicates the balance between welcoming visitors and maintaining vibrant year-round communities, with ongoing discussions to refine policy frameworks.
Why It Matters
The regulatory wave sweeping UK cities in 2025 signals a critical shift in how governments are prioritising long-term housing needs over short-term tourism gains. With rents rising sharply in major cities and local communities squeezed out by investors converting homes into holiday lets, the urgency to act has reached a tipping point. According to recent figures from Shelter UK, nearly two-thirds of workers in England struggle to afford private rent, highlighting the broader challenges in the housing market.
Short-term rentals have become a flashpoint in wider debates about affordability, sustainability, and the right to housing. As the UK government continues to consult on national reforms, city-led initiatives are setting important precedents that could reshape housing and tourism policy for years to come. Getting the balance right between welcoming visitors and preserving communities is now one of the most urgent challenges in urban planning and property regulation.
“As more UK cities tighten regulations on short-term rentals, the landscape for property owners and renters is rapidly evolving. London’s 90-day whole-home rental limit is a landmark policy aimed at preserving long-term housing supply, but enforcement remains complex given the diverse nature of hosts, from retirees supplementing income to investor-backed operators. Similarly, Edinburgh’s tourist tax and Brighton’s crackdown on unlicensed rentals demonstrate how local governments are balancing the need to fund vital public services while managing the impact of mass tourism on communities.
These efforts highlight a critical tension: while restricting short-term lets can help cool inflated housing markets, overly rigid policies risk pushing out responsible hosts and driving rentals underground. It’s essential for cities to implement smart regulations that incorporate clear licensing requirements, health and safety standards, and distinguish between commercial investors and local residents. For example, allowing second-home owners to rent within reasonable limits while cracking down on large-scale operators can protect housing affordability and community character.
The ripple effects extend beyond housing. Short-term rentals contribute significantly to local economies. Average guest spending exceeds £250 per night in cities like London and Edinburgh, supporting cafes, cleaning services, and retail businesses. Blanket bans could disrupt these economic benefits, so the goal should be balanced policies that support sustainable tourism alongside housing equity.
In short, the future lies in nuanced, data-driven regulation that protects both residents and the economic ecosystems that short-term rentals help sustain,” says Property Expert, Jes Johnson of SmartMove.us.