The effect for landlords & tenants?
AirBnB was founded in 2008, although its become more popular in the UK in recent years as news has spread of an alternative way to make money from your bricks and mortar. Loose regulation means that landlords are turning from long-term rentals to offer holiday lets. What’s the impact?
This article does not constitute advice.
Professional advice should be taken prior to acting on any part of it.
Landlords change tact with rental
An industry report by The Residential Landlords Association (RLA) suggests that landlords are opting to advertise their property on letting sites such as Airbnb, Holiday Lettings and Home & Away, rather than the open rental market.
This could cause a shortage of property available for long-term rent, particularly in London, and could also cause the price of rent to increase, due to higher demand.
A similar situation happened in Berlin and subsequently a law was been passed to restrict Airbnb to room rental only, rather than the option to let the entire home. As a result regular rents have moderated again.
Favourable tax advantages for holiday lets
In other countries outside the UK, regulation for Airbnb is also tighter, and it is expected that the UK will follow suit in due course.
Not only are regulations looser in the UK, but there are currently tax advantages for landlords renting a property as a short-term holiday-let.
Some tax breaks for landlords will be removed from next year. Higher-rate tax payers will be unable to claim tax relief on mortgage interest above the basic rate of tax. This could be causing landlords to seek ways to maximise their returns for their property investments.
Avoiding correct planning permission
The wider concern from the RLA was that properties advertised on Airbnb for longer than three months, were avoiding planning regulations, required for genuine holiday lets.
However, Airbnb has challenged this statement saying that properties may be advertised for longer than 90 days but many are rented for much shorter breaks.
Airbnb argue that their platform allows those with property, particularly in London, to get money back in their pocket to cover the expensive living costs of the city, and have denied generally that a growing number of their clients are landlords.
The report by RLA suggests that London properties on Airbnb have risen by one quarter between February and June this year, and that almost 22,000 properties are listed, showing an increasing commercialisation of this as an option for property owners.