More landlords are starting to offer properties for short-term lets through Airbnb because of the clampdown on buy-to-let.
Research from the Residential Landlords Assocation’s research lab PEARL showed a 199 percent increase in the number of short-term lets on Airbnb between 2015 and 2017. This year, there were 213,934 listings. The RLA used data from Airdna, which looks into Airbnb listings, and found the biggest increase over that two-year period was in Birmingham, where there are now 1,834 listings. The research showed that 69 percent of them were by people or companies with more than one property, which led them to suggest they could be landlords.
In the past year, Cardiff has seen the biggest increase in listings which are up 259 percent to 5,428. Of these, 56 percent are listed by hosts with more than one property. Nearly one in five homes to rent in Cardiff are now being offered through holiday online portals such as Airbnb.
Landlords have been hard hit by the clampdown on buy-to-lets with increases in tax, decreases in mortgage relief and stamp duty imposed on second properties. So, some are now looking at other ways to run their business. Other research from RLA PEARL has found that one in three landlords now offering short-term lets were doing so because of the tax increases. These changes do not apply to short-term lets.
Overall the number of properties listed on Airbnb has risen by 54 percent in the past 12 months, including an 8 percent increase in the number of listings available for more than 90 nights a year. The RLA research shows potentially this could mean 12,213 properties are now unavailable for long-term rent. Analysis also shows a 75 percent growth in the number of multiple listings on Airbnb, suggesting more professionals are turning to the portal rather than home-owners wanting to let out their spare room. The survey findings also provide evidence that 7 percent of landlords are moving their properties from long-term lets to short-term. More than one in three landlords said this was due to changes in mortgage interest relief.
Another option would be for landlords to sell their rental properties but, again, they would be penalised through capital gains tax. It is feared that these tax changes will result in fewer houses to rent long-term at a time when more people are turning to rental accommodation because they cannot afford to buy. The RLA says that these figures suggest the government needs to look at scrapping the changes to mortgage interest relief.
RLA vice-chair Douglas Haig said that these tax changes are incentivising the use of rental homes as short-term holiday lets. He added that tenants will be the ones who suffer because there will be fewer properties available for long-term rent. The government wants landlords to offer more security for tenants through longer leases but is actually making it more difficult to do so. Mr Haig said the government needs to change its tax policy to achieve this aim. Obviously the government needs to act if it wants to meet the extra 1.8 million homes needed to rent by 2025.
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