My house deeds state that the property is to be used only as a private dwelling house. Would that prevent me setting up a room rental business with online agencies such as Airbnb, and would I have to notify the council?
I wouldn’t have thought so. The clause in your deeds is a covenant, which is likely to have been placed there by the original builders of your property in order to preserve the general upkeep of the area. They would be unlikely to want to enforce it even if your neighbours complained, which is at best a remote possibility. As regards the council, they would only be interested in your “business use” of the property in the unlikely event that it affected your neighbours.