Due to travel restrictions imposed during the Covid-19 pandemic, the market for British holidays has grown, resulting in an increased demand for holiday properties in many areas across the UK. Farmers and land owners are realising the unlocked potential in their previously disused acreages, with lodges, log cabins and temporary structures being turned into successful holiday homes as a way of generating more income.
But before you begin to build that annex in your back garden, you need know what the rules are around planning permission for holiday lets.
In this post we’ll delve into the different aspects of planning permission for holiday lets and how they might affect your holiday let business.
Do you need planning permission for a holiday let?
An application for planning permission is only required when the proposed changes meet the statutory definition of ‘development’, and it can also include permission for things like demolition.
There are specific restrictions that apply to certain types of structures, and the purpose of the building is also taken into account. If you’re planning on building a structure that’s intended to receive paying guests, you need to make sure that the planning permission approves this use for the structure.
It’s is usually granted in the form of a buildings license that will detail the proposed plan. Carrying out work without planning permission is risky and it’s common to see demolition of un-authorized buildings, so it’s best to make sure that you have had all your building work approved before you begin.
New holiday let planning use class in England
The Government will be introducing a new planning use class for holiday lets in England, potentially as early as autumn 2024.
This comes as part of a long-term scheme that aims to provide councils with more control over short-term lets in their areas.
The new planning class for short-term lets is called C5, which will take them out of their current dwellinghouse class, C3.
Short-term lets in this case are defined as 'a dwellinghouse that is not a sole or main residence, for temporary sleeping accommodation for the purpose of holiday, leisure, recreation, business or other travel' - therefore second homes that are let out for any number of nights per year would class as a C5. Homes that are a main/sole residence can let out for up to 90 nights per year without requiring planning permission.
Holiday lets that were in operation prior to these legislation changes will be automatically transferred to the new C5 planning class.
Properties will also be able to transfer freely between the C3 (dwellinghouse) and C5 (short-term let) classes, providing that the Local Authority do not make an article 4 direction, which would give them the ability to restrict this. Any dwellinghouse that becomes a short-term let after an article 4 direction is made will need to apply for planning permission.
In order to make an article 4 direction, the Local Authority would require robust evidence of a local issue (for example, a lack of housing due to short-term lets, based on data from the new registration scheme (find more details around this on our holiday let rules and regulations guide)), and they would have to limit this restriction to as small an area of their Local Authority as possible. They would likely need to give a year's notice of introducing an article 4 direction.
If you have a property that isn't an existing short-term let, or you are thinking of buying a holiday let, consider this before an Article 4 direction is introduced in your area.
In the meantime, we will carry on highlighting to the Government and other decision makers the contributuon that holiday lets and their guests make to their local economy, especially compared to empty homes and the failure to build on plots of land with planning permission (landbanking).
Please note: Sykes Cottages can't provide you with legal or planning advice and the above should not be taken as such, rather as a prompt of the issues involved for further consideration. As always, please read the relevant laws, regulations and guidance and seek advice from external experts where you require it. We shall not be liable for any loss or damage arising under or in connection with any action or decisions you take or do not take as a result of reading the above or any loss suffered as a result.
Stages of planning application
Applying for planning permission can be a very daunting prospect. It’s not a straight forward process so you need be sure that you prepare for what lies ahead.
There are two types of applications: full planning permission and outline planning permission. Make sure you understand which one you need to apply for.
Applications for full planning permission are based on detailed proposals of the development, outline planning permissions is used to obtain a decision based on the proposal of general principles.
Whilst some councils will differ, the 4 main stages of planning permission are:
Contact your local council for an initial conversation. It would be beneficial to have a plan that you can specify, even if you are just making initial enquiries at this early stage. Your local council can provide you with guidance for your local area.
Begin speaking with design teams or architects. You’ll need to think about how your going to carry out your plans. Will you need an architect? Are you planning on purchasing a pre-built structure? Do you know where you will get your supplies.
Submit your plans to the council. Once you have finalized your plans, you need to submit them in full to the local council and then wait for approval. Be aware that it can take at least 8 weeks to get a decision on the plans, so you need to factor for this timescale. Leave time for re-submitting amendments if necessary.
Have an advisor visit the land to discuss your holiday let plans. At this stage, one of our property consultants will be happy to come and visit you to advise what you can expect from the location in terms of bookings and expected income.
For your application to be considered by the local council, you will need to provide payment of the correct fee in full, all essential plans of the site in full, the required supporting documentation and completion of the form in full.
Note: It’s best to supply an architectural drawing of the existing floor plan alongside the floor-plan that your are proposing for development.
What can affect planning permission being rejected?
There are various reasons why your request may be rejected, and often some of these reasons can be unique to the local authorities. However, some of the most common reasons include:
The location: If the land is part of a green belt, a national park, an area of outstanding natural beauty, or a heritage site.
Nearby properties: If a property on the land is listed this can affect approval. If you are using the revenue from the potential holiday letting to supplement repairs of the listed building, it is worth mentioning this in your application.
Local Plans and Neighbourhood Plans: These directives are created by communities to allow them to shape the development and growth of the local area. They are often used when determining planning applications, for example if your venture fits into their vision then you will not need planning permission.
The type of permission required can be dependent on what sort of holiday let you are considering building. If you are purchasing a temporary structure, for example, you may not require any planning permission at all. Let’s take a closer look.
Converting an outbuilding into a holiday let
Converting unused or derelict outbuildings into holiday homes is a great way to generate another source of income and is a popular choice for farmers or land owners wishing to diversify their land. Planning permission will be required for any alterations to your outbuildings and a ‘Change of Use’ may need to be applied for.
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With the UK holiday industry in boom, many people are considering the option of turning their spare outside garden space into a holiday letting business. It’s a great idea and a very exciting prospect, but it does come with some rules and regulations that you may not be aware of.
Buildings that are located in peoples gardens are often referred to as a garden annex. Structures of this type are very popular because they are generally very affordable.
What is the Caravan Act and how will it affect your garden structure?
Under the Caravan Planning Act, you are not required to have planning permission if the structure can be moved, but if you are using it for business purposes, then you will require full planning permission.
Choosing to build a mobile structure is a very flexible option. This kind of annex can cost approximately £30,000, and can be ordered in various different layouts and sizes.
Most commonly they will include a living space, kitchen, bedroom and bathroom. They can come with ground work, heating and internet and still not require planning permission under the caravan act.
The maximum dimensions allowed under the act in England and Wales are;
It’s a great option if you are unsure if you want to commit to a business, because yon can purchase and build the structure without planning permission, then apply for permission if you choose to go ahead with a holiday let business.
Likewise, if you chose to stop running your holiday let business, the entire structure can be sold and moved in one piece.
Do I need planning permission for a lodge or log cabin?
Lodges and log cabins have long been popular choices for many wanting to escape busy city life in favour of a calmer rural setting. But what planning permission will you need?
It will depend on factors such as how large the structure is, how close your structure will be to the boundary of your land and what the regulations are in your local area. The use of the structure as a holiday let will require full planning permission.
You’ll also need to consider the materials that you will be using for the roofing and be very careful about the positioning of the structure on your land.
You may still be able to build a lodge or a log cabin without planning permission, but certain rules will apply. For example, in England, you wont need planning permission if:
Your log cabin is built within 2m of a boundary and does not exceed a max height of 2.5m
Your log cabin does not have any verandas, balconies or raised platforms exceeding 0.3m in height
Your log cabin is single storey
You may be able to purchase and construct a log cabin or lodge without planning permission based on the criteria above, but as mentioned, the most significant regulation will be with regards to the intent for the structure. If you decide to turn it into a holiday let, you’ll need to apply for a ‘change of use’ permit.
Note: If you have neighbours that might be impacted by the height or position, it may be worth having a conversation with them as early on as possible, to save any disputes further down the line.
This is especially recommended for holiday letting, because disgruntled neighbours can have a significant impact on a holiday letting business.
Converting a residential property into a holiday let?
Letting out your residential property as a holiday let can be a very lucrative business idea, but you could be breaching planning law rules if you let your residential property out without checking the rules and regulations that apply to the building in question.
Usually, you’ll require planning permission to materially change the use of the property and this needs to be obtained from the local council.
What is the cost of planning permission?
You’ll need to consider the cost of the planning permission in your area and make sure that you factor this into your overall financial plan for your business. Here are the current costs for planning permission applications by area:
England: A full planning permission application for a new single-family house in England costs £426.50. If altering or extending a single dwelling or a flat, the full planning permission application fee is £206; if altered or extended two or more dwellings/flats, the full planning permission application fee is £407.
There is a cost of £426 for an outline planning application in England for every 0.1 hectare (up to 2.5 hectares), whereas a householder application for only more minor changes to a single dwelling house is only £206.
Wales: The fees for a full planning permission application on a new single dwelling house are slightly higher in Wales at £460. A householder application for outline permission costs £230, and an application for 0.1 hectare costs £460.
Scotland: A full permission application on a new house as well as an outline application costs £401 in Scotland, while a householder application costs £202.
Do I need planning permission for a yurt or shepherd’s hut?
Shepherds huts and yurts can make excellent, unique holiday escapes and they are the most common types of ‘temporary structures’ that are used in the holiday letting business.
Though they can fall under the rules and regulations of the Caravan Act, some structures might still require you to obtain planning permission despite the fact that the building isn’t permanent.
Planning permission will be required if:
The building’s external appearance is materially affected by the structure
When the building occupies more than 25% of the available space on your property
If the temporary structure is within 5 meters of your site boundaries
For temporary buildings that will be occupied for more than 28 days
If the floor space exceeds 200 square meters
In the event that the assembled structure reduces the space available for parking or manoeuvring vehicles
If the structure stays up for longer than 28 days, you may need to apply for a ‘Change of Use’ permit.
Important things to note
If your application is approved, it lasts for three years. After this period you will have to apply a second time.
If denied, the council will always give you reasons behind this decision. It can be worth taking these observations into account and altering the plans to the requirements, then resubmitting.
If you are purchasing a temporary structure, make sure that the company has attained the British Standard, to ensure that safety regulations have been adhered to.
If you are hoping to join Sykes, we would require each property to be fully self-contained, with a bathroom and self-catering kitchen.
The cost of planning permission varies dependent on which country the land is based in. It is best to check with your local authority for an exact figure.
Be sure to prepare yourself for the possiblity of needing to acquire a license. Both Scotland and Wales are edgeing towards putting laws in place that will require property owners to have a license before letting out their property for holiday letting.
Funding and Grants
There have been many various forms of funding available for people in rural areas to diversify and expand their businesses:
Rural Development Programme for England
For projects that create jobs, help your business to grow and benefit the rural community you can apply for LEADER funding. You can visit the government website to find out more about this funding and if it could help you and your holiday let business.
Scottish Rural Development Programme
The SRDP aims to invest millions over 7 years to support various projects such as enhancing the rural community through hospitality and tourism. The programme offers support with education and information as well by providing resources to help farmers innovate for sustainable economic growth.
Rural Business Development Grant Scheme in Northern Ireland
The Rural Business Development Grant scheme is available to support smaller rural businesses with sustainable plans for development by providing small capital grants for micro businesses.
Funded by the Agriculture, Environment and Rural Affairs, it can provide up to 50% of capital costs up to a maximum of £4,999. The scheme is managed by local councils, so get in touch with them to find out if you can benefit from this scheme when setting up your holiday letting business.
Need help with the next steps of your holiday letting journey?
If you're thinking of buying a holiday let or just need some advice, our property experts can help answer any queries you may have.
The information contained in this article was accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time, so please contact our prospective new owner team if you’d like to hear how. Nothing in this article constitutes the giving of financial, tax or legal advice to you; please consult your own professional advisor (accountant, lawyer etc). in this regard. If we have referred within the article to a third-party provider of unregulated holiday let mortgages, this is due to the fact that such mortgages aren’t currently regulated by the FCA. As a helpful reminder, your home may be repossessed if you do not keep up repayments on a mortgage, so again anything you decide to do in this particular area this is one on which you should take your own professional advice on too, as we aren’t providing and can’t provide you with this.
Charlotte Beautement, Holiday Let Content Writer
