The fast-growing short-term lettings market has been hit particularly hard by COVID-19, but is expected to bounce back in the coming months, making now a good time to consider its future, according to property management software provider PayProp.
At the end of May, the House of Commons Library published a 46-page briefing document discussing the calls for greater regulation of short-term lets.
The document reiterated the government’s position that it has no plans to ban the use of residential property for short-term lets.
It added that further legislation of short-term lettings would be overly bureaucratic and could act as a barrier to households letting out their properties on a short-term basis.
Instead, the government suggested a ‘non-regulatory approach’ to encourage improved standards and promote best practice in the industry.
Whether this is workable will be a matter of intense interest and debate in coming months, said Neil Cobbold, group chief sales officer at PayProp.
ARLA Propertymark research found that the number of UK Airbnb listings reached 223,000 in 2018, up from 168,000 in 2017, a rise of 33%.
By March 2020, there were 88,100 Airbnb listings in London alone, almost five times higher than the number recorded in April 2015, according to analysis by campaign organisation Inside Airbnb.
Cobbold said: “The rapid growth of the short term lettings sector has encouraged calls that it should be regulated, which is understandable considering the level of regulation in the traditional private lettings market.
“Despite the government’s opposition to formal regulation, the briefing document indicates its acceptance that the future of short-term lets needs to be discussed, which is positive in itself.
“Debate around the questions raised in the briefing paper could lead to new solutions for some of the issues around the sector, while still allowing it to thrive.”
The government’s briefing paper outlined both the benefits and concerns around the growth of short-term lets.
Benefits include the tourism boost short-term lettings can provide and the options for landlords or property owners with empty properties.
On the other hand, the paper pointed out a lack of taxation compliance by short-term landlords, the impact on local housing markets, and health and safety issues.
Cobbold said: “The issues raised by widespread short-term lets are well-documented. However, the financial benefits for local economies and landlords are hard to ignore.
“Finding a balance that recognises the value of short-term lets while minimising the impact of the issues they cause will be crucial to the sector’s long-term success.”
Cobbold suggested that one of the key issues the government may confront is that there is currently no single source of regular data on the short-term lettings market.
He said: “Airbnb is the most used platform, but there are a range of other websites out there.
“Better and more consistent reporting of short-term lets data would make it easier to track growth and trends.”
Another issue that could be discussed is annual limits on short-term lets.
Currently, properties in London can only be let on a short-term basis for 90 nights per year, but there are no restrictions across the rest of England.
Cobbold said: “It’s been reported that the 90-day rule in London is flouted regularly, so its effectiveness needs to be reviewed.
“What’s more, as the popularity of short-term lets grows in other cities across the country, similar limits may need to be considered elsewhere.”
Finally, he said that the results of Airbnb’s ongoing consultations with stakeholders on a registration system for short-term rentals could be crucial to the future of the industry.
Cobbold said: “Implemented effectively, a short-term lets registration system could help the sector to professionalise without introducing too much red tape.”