The Rental Revolution: What is the Sharing Economy doing to the PRS?
As the way in which we do business changes, the ‘sharing economy’ is on the rise in the UK. More and more people are now using sites such as Airbnb to rent out homes as an alternative to staying in a hotel, with more than 33,000 listings in London alone.
This research report explores the extent of the use of Airbnb and its impact on the private rented sector. Two sources of data are presented. Firstly, to understand the use of Airbnb in London we conducted an analysis of Airbnb listings from insideairbnb.com. Secondly, we used a survey of landlords to explore their experiences of tenants who had sub-let through Airbnb or a similar platform.
The findings highlight the negative impact of this technological revolution. From 33,715 Airbnb listings in London, 65% were available for more than 90 days per year. In addition, 64% of entire homes/apartment listings were available for more than 90 days per year (11,296 listings), with an estimated annual revenue of £144,227,328.
Not only is this unlawful in relation to the current planning regulations, it is removing housing from the market, while individuals are capitalising on the lack of housing supply. A more striking finding was that 39% of entire homes/apartments were multi-listings (where the hosts have more than one listing), and 78% of these were available for more than 90 days. This further confirms the way in which businesses are capitalising on this change and preventing those in need of homes from securing a place to live.
Listings available for more than 90 nights
Number of entire home/apartment listings available for more than 90 nights
Number of entire homes/apartments that were multi-listings
Furthermore, from our survey of landlords we identified that 15% had experienced their tenants sub-letting properties without permission on Airbnb or a similar platform. Of those properties that were affected, 48% were in London.
The majority of landlords (34%) discovered what was happening when they visited the property, 23% when complaints were made by neighbours and 18% by checking online. Others discovered what was happening when contacted by a sub-letter or the police.
Many of the landlords raised concerns over the increasing costs of repairs and the legal implications of illegal sub-letting, which could leave them in breach of mortgage conditions.
The case studies of landlords included in section 3 of this report demonstrate the serious consequences of tenants sub-letting without permission, with landlords losing thousands of pounds to lost rent and repair bills.
We at the RLA are calling on the Government and the London Mayor to review the use of Airbnb and other similar platforms and the impact on housing affordability and landlords. The sharing economy is allowing individuals to profit on the long term use of property on Airbnb and is removing a significant amount of homes from the market. There are also concerns worldwide over safety and the potential for fraud when using these platforms.
Airbnb itself takes no responsibility for any of the illicit use of its services. What is clear is that this is a significant issue that warrants further action, and we recommend an assessment of the impact on housing affordability and rents in London, education of tenants on the issue of sub-letting, and education of landlords on the issues surrounding the sharing economy and breaches of licensing, mortgages, and insurance.