Airbnb has taken the world, and with it, the London rental market, by storm and now boasts an incredible 43,000 listings, and counting, in the capital. Whilst the online marketplace and hospitality service, renowned for its short-term lodgings and holiday rental options, is popular amongst millennials, its impact on the traditional rental market is real and needs to be recognised.
The major concern amongst property experts and commentators? That an increase in landlords using Airbnb reduces the number of properties on the traditional rental market, in turn driving up the cost of renting. This is a trend that has been recognised by a Mayfair estate agent , who acknowledge that this trend is particularly problematic in London, where a notable shortage of properties available for rent is already widely acknowledged.
Policy Director of the Residential Landlord’s Association (RLA), David Smith, suggests that this ‘will only serve to hit the hardest those young people and families who most need a growing private rented sector.’ This is particularly relevant in the current climate, where buying is challenging for many.
Frustration is mounting amongst some of Airbnb’s fiercest critics, who not only suggest that little has been done to regulate the service, but also that there are significant incentives for Landlord’s to transfer their properties from the traditional rental market to, short-term, holiday-lets, with Airbnb acting as a platform that makes this both possible and lucrative.
These include the government’s introduction of £1000 tax-free income allowances for ‘micro-entrepreneurs,’ (users of Airbnb qualify), to increase their annual revenue. In addition to this, the RLA suggests that changes in mortgage interest relief have meant a shift in the taxing of Landlords from income, to profit generated.
However, to give Airbnb it’s due, it has recognised its problematics and sought to self-regulate, taking a stand in early 2017 to clamp down on users who let their property for longer than the approved 90 days per year. Whilst Airbnb does all that it can to block users who exceed the 90-day upper limit, critics remain sceptical, with a spokesperson for Westminster Council asserting that ‘it is hard to argue there has been any impact, as the so-called 90-day limit can easily be circumnavigated.’
However, placing all blame on Airbnb for the state of the current market is something that Murray Cox, founder of the website Inside Airbnb which seeks to provide an insight into the figures and statistics Airbnb themselves refuse to reveal, refuses to accept. He suggests that citing Airbnb as ‘the cause of housing issues…is taking it too far,’ as these cities were expensive, to begin with.
To this extent, Airbnb could be seen to function as something of a scapegoat for areas where the rental market is particularly stagnant. A prime example, Kensington and Chelsea, a borough in which the average property stays on the market for an average of 107.9 days. As opposed to being open to recognising other trends which may affect the market, borough officials intend on imposing sanctions upon users of Airbnb, with the implementation of a licensing system on the cards.
One thing is for sure, Airbnb and the subsequent Airbnb-effect, are here to stay. As with any form of revolutionary technology, the platform is (and should be) unapologetic in its ability to rock the boat, encouraging people to reconsider the manner in which the society we live in functions. Whilst it may take some time to adjust to a rental market in which Airbnb is a major player, it’s important to remember that, in the long run, change can often be a good thing.