Airbnb and similar sites, along with the ‘sharing economy’, has been growing significantly over the past four years. So much so that recently the Government has announced a £1000 tax-free allowance for those using the ‘sharing economy’. In the past few months we have had a number of calls to our Landlord Advice Team where landlords have found that their tenant is sub-letting the property on Airbnb without their permission. From this, we wanted to investigate the full extent of this issue in London and see how it is affecting the housing market.
Our research identified that nearly two thirds of all listings on Airbnb in London were available for 90 nights or more. While planning regulations have been relaxed in 2015, it still is a breach of planning regulations to let a property on a short term basis for more than 90 cumulative nights per year without permission. Our findings identified 64% of entire home/apartment listings were available for more than 90 nights per year, we argue that some home owners or tenants are in breach of the planning regulations, yet, we are unable to identify the full extent of this issue without further research. However, our research findings did identify that the average occupancy for entire home/property listings was 91 nights per year. Just above the 90 night per year threshold.
The findings of our research also shows that nearly 7,000 homes or flats are multi-listings, where hosts have more than one property on the site. 78% of these listings are available for more than 90 days per year.
These findings show that the use and substantial growth of Airbnb and similar sites is removing housing from the market, preventing those in need of a home from either renting or buying.
In our research we also found substantial evidence that tenants were using Airbnb and similar sites to sub-let properties without the consent or knowledge of their landlord.
In a survey of our members we found that 15% of landlords had discovered that their tenants had been advertising their property or rooms on sites such as Airbnb without asking for permission. Our analysis identified a number of troublesome cases with landlords facing huge repair bills.
In the last 12 months, Alexandra experienced tenants sub-letting her property online through various sites including Gumtree. Alexandra only found this out when she was contacted by a prospective sub-tenant who had got the number from the neighbour. This prospective sub-tenant had turned up to collect keys for the property and four or five other groups of other sub-tenants had turned up at the same time. Alexandra discovered that the tenants had let the entire property and had taken a £1,500 deposit from each group of sub-let tenants. Alexandra had to contact the police, but the original tenant had vanished and left the property ‘wrecked’.
The damage included: a key superglued into lock, locks missing off the inner doors, the backdoor forced off its hinges, a missing window, damaged furniture and general dirtiness. This was not the only problem Alexandra faced. The tenants were already in arrears with their rent, having missed a number of payments, and Alexandra discovered that one half of the couple had been using the garden shed to sell drugs. Overall, Alexandra was faced with a repair bill just over £7,000, rent arrears, and over 14 days of work to fix the damage to the property.
Those taking up the lets have no insurance protection should there be an accident in the property, have no protection for any deposit requested and could face immediate removal once the landlord finds out.
Landlords whose properties are sub-let without their knowledge could also face problems under the new ‘Right to Rent’ legislation as they will not have been able to check the residency status of tenants and also could unwittingly fall foul of HMO licensing requirements. They could also be contravening their mortgage and insurance conditions.
We are calling for an urgent review by the Government and the Mayor of London into the use of holiday letting sites and how to clamp down on criminal practices by property owners and tenants.