Over the past few years there have been significant changes in the private sector market, from reform in taxation for landlords to the introduction of energy efficiency standards. Also in the same period there has been a dramatic increase in the number of short term lets on online platforms such as Airbnb, Booking.com, HomeAway, Niumba and Trip Adviser.
If we take the London rental market as the most obvious example, historically renting a property in the capital has always meant a fairly long term commitment, with the landlord and tenant signing up to a minimum 12 month tenancy (sometimes with the ability to terminate from the six month point onwards). However, in today’s much more transient and flexible world, the market for short term lets is greater than ever before.
In London the average monthly rent for a one-bedroom flat, according to Zoopla, is £1,703, while the average rent for any sized rental property including houses across the UK is £926. Compare this to Airbnb’s average one-bed cost of around £100 a night and it becomes clear why more landlords are looking at this as a way of boosting their yield.
One home in 50 in the capital is now advertised for short-term lets in a boom that is making it harder for London residents to secure a permanent home, it is claimed. A recent survey carried out by London Councils, the body that represents all 33 local authorities in the capital, found over 73,500 flats and houses available on the leading online letting platforms, representing about two per cent of the total housing stock.
Currently planning permission is required to rent out homes on short lets for more than 90 nights in a year, but councils say this is almost impossible to police and there have been very few prosecutions to date.
There are fears that the market is growing out of control. Boroughs are receiving more and more complaints about short term lets linked to anti- social behaviour and even criminality. At a time when almost one in 50 Londoners is homeless, London Councils are now calling for stronger regulation. Campaigning has begun for government action to provide a public and mandatory registration of short term lets and powers to punish irresponsible property owners, with heavy fines for rule breaches, together with investment for significant resources to monitor the market and enforce standards.
