The short-lets market – led from the front by global giant Airbnb – tends to divide opinion. Thriving but controversial, popular but deemed too unregulated by some, it has boomed in the last decade as the sharing economy has grown beyond all recognition.
But what do agents need to know about this rapidly growing sector?
A large marketplace
Airbnb, comfortably the biggest short-lets website, but far from the only one, says it currently has approximately 223,200 active listings in the UK, generating average earnings for hosts of £3,100 per year.
From this, a number of Airbnb management firms have sprung up, including Airsorted, Hostmaker and GuestReady.
Airbnb is at its most popular in major cities, and in particular major cities which are tourist and cultural hotbeds such as Edinburgh and London.
A recent consultation carried out by the Scottish government showed that Edinburgh as a whole is home to 31.38% of all of Scotland’s Airbnbs, equivalent to 9,994 short-term lets in total. Meanwhile, one in six properties in Edinburgh’s City Centre ward now come under the bracket of Airbnbs, with more than 2,700 of Edinburgh’s nearly 17,000-strong housing stock listed on the short-let website.
In late October, it was revealed that a majority of people in Scotland favour imposing regulations on short-lets, with a three-fold increase in Scottish properties let for short-term use since 2016 leading to concerns about supply, a potential rise in anti-social behaviour and other issues associated with Airbnb-style lets.
As a result of the consultation, the Scottish Government says it’s looking at whether to regulate Airbnb and other short-let activities after a consultation found widespread support for greater controls.
At the start of November, it said it was now considering the analysis of responses to the consultation, which also highlighted the economic benefits brought by short-term lets, with policy proposals expected to be announced before the year is out.
While there are well-known downsides to a proliferation of short-lets – for example anti-social behaviour, safety fears and impact on a local housing market – there are certain upsides which have helped short-lets to become so popular, including flexibility, affordability (when compared with hotels and B&Bs) and contribution to the economy.
It was recently revealed, for instance, that Airbnb guests are set to spend an estimated £223 million at restaurants and cafes around Scotland this year, a 29% rise on 2018. In Edinburgh alone, Airbnb guests are expected to spend £95 million during 2019, up £20 million from last year 2018.
Globally speaking, Airbnb said its ‘guest community’ spent an estimated £19 billion at restaurants and cafes in 2018, based on data for 46 countries and regions. In 2019, this is expected to rise to more than £24 billion.
A short-lets backlash?
Despite its evident popularity and clear boost to local economies in terms of increased spend in restaurants and cafes, many cities across the world have fought back against short-lets in recent years.
Paris, London, Barcelona, New York, Berlin and Amsterdam are just some of the cities which have introduced restrictions, to varying degrees, while in June this year ten European cities clubbed together to ask for more help from the EU in their battle against Airbnb and other short-let rental websites (including Booking.com and HomeAway).
Elsewhere, a leading property management firm issued a warning to landlords to be wary of short-lets as a way of countering falling earnings, while in May 2019 Sadiq Khan, the Mayor of London, was urged to ban Tube adverts which encouraged landlords in the capital to break short-let laws. This eventually led to management firm Hostmaker pulling its advertising campaign from the TfL network after mounting criticism.
So, while the short-lets market is undeniably something landlords and letting agents need to be aware of, there is an equal move to ensure they are effectively restricted and regulated where they are perceived to cause damage.