More Airbnbs and less long-term rentals would be ‘cat…
ARLA Propertymark has released details of its written response to a parliamentary committee investigating the impact of Airbnb-style short rentals on the wider rental market – and it takes no shots at the potential dangers.
Earlier this year the House of Lords Built Environment Committee launched an inquiry into the impact of short-term rentals on housing markets.
In response to claims by some elements of the short-term rentals industry that there was no link between the growth of short-term rentals and housing shortages, ARLA Propertymark provided its own briefing to the committee in June ; this has now been published on the Propertymark website.
He says his concern about the impact of short-term rentals can be summed up in three main points.
“First, tenants are currently struggling to find accommodation and an unregulated increase in short-term rentals would only make it more difficult to find accommodation. Second, we see landlords selling their rental properties and leaving the private rental sector. Third, there are few alternatives for people looking for accommodation outside the private rental sector. Overall, people are finding it increasingly difficult to find housing. As the market is tight, any further decline in the availability of long-term rentals will have significant consequences for tenants.
ARLA Propertymark says its research shows that of the 23% of landlords who offered short-term rentals in 2019, 12% did so by changing properties from longer-term rentals to short-term rentals. Extended to the UK homeowner population, this potentially means 46,000 properties have been taken out of the private rental sector since 2015.
He adds that given the current state of the private rental sector since 2019, “a large number of owners switching to short-term rentals is a likely scenario”.
He says the most cited reason owners plan to downsize or sell portfolios was the series of existing and promised legal changes.
Propertymark told the Lords Committee: “This is reflected in the top reasons landlords opt for short-term rentals: 46% because of the greater flexibility offered by short-term rentals, 37% because regulations on long term rentals are too burdensome. , 31% because they can charge higher rents per night.
“This suggests that there are several incentives for landlords to enter the short-term rental business. Research published by the University of Manchester found that an average two-bedroom apartment in Manchester city center Manchester and Hulme could generate between 1.7 and 2.9 times the amount of rent it could generate from long term rent This is with an occupancy rate of 80 per cent Even though legislation limits the number of days landlords can rent a property short-term, short-term rentals can still be more profitable for landlords.
The trade body goes on to share six recommendations with the committee to avoid what it calls the “catastrophic implications” of switching from longer-term to short-term rentals. These are:
1. Any legislative changes should ensure that local authorities have the appropriate regulatory powers to balance the needs and concerns of their communities with wider economic and tourism interests. This will require localized solutions rather than a one-size-fits-all approach.
2. The government should carefully consider the impact of any new regulations on the private rental sector if they cause landlords to start using their properties for short-term rentals, thereby reducing the supply of housing for the local population.
3. The government should consider extending current health and safety requirements and tenant protections for short-term rentals.
4. Ensure adequate enforcement procedures are in place if day limits are imposed on short-term rentals.
5. Any legislation will need to distinguish between one person’s property being used for short term rentals when it is underutilized and large commercial landlords renting entire properties full time.
6. Consider introducing limits on short-term rental activities in areas where there is a demonstrable impact on the supply of private rental accommodation.
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