Homesharing and London's housing market
If we want to make sure homesharing continues to benefit the tourism industry without reducing housing supply in London, we have to enforce the rules so people don’t take advantage of the system.
There is a worsening housing crisis in London due to undersupply and rising unaffordability of homes. With homesharing – home owners letting their homes or rooms out to visitors for short-term stays – becoming more popular, and many property owners answering this demand with increased supply, people are naturally questioning whether the increase in property being let on a short-term basis (i.e. through sites such as Airbnb) is reducing the housing supply.
If owners think they could potentially earn more from consecutive short-term lets than one long-term let, they may choose to homeshare over putting properties up for long-term lets, catering for tourists rather than residents.
Currently, the amount of London’s private housing stock being let through homesharing host sites is negligible – just 1% of London’s private housing stock was rented through Airbnb as an entire property for at least one night in 2015. In addition, not all homesharing properties would be suitable for long-term lets. Therefore, the current impact this has on housing supply is low. However, data from Airbnb shows homesharing is rapidly increasing – the number of entire homes that hosted at least once during the year was 42 times higher in 2015 than in 2011, and over the course of 2015 alone 4,938 properties were let for more than 90 nights. If this trend continues, it is possible homesharing could start to impact housing supply and worsen the housing crisis in London, particularly within specific boroughs with high housing pressures in the central area.
It is too early to assess whether additional measures need to be taken, but it is important the existing rule, that a property cannot be casually let for more than 90 nights a year unless the relevant planning permission is secured, is properly enforced. This restriction prevents properties from being permanently let as a series of short-term lets and encourages owners to use the private rental market if they are looking for permanent residents, boosting the housing supply.
We have made several recommendations to help achieve this. Key is homesharing host sites introducing an automatic cap on their websites preventing hosts from letting properties for more than 90 nights unless they show they have the relevant planning permission. This has already had an impact as in December 2017 following our research and recommendations Airbnb, the biggest homesharing host site, announced the introduction of such a cap in London. Following this move, in March 2017 the Mayor of London wrote to six further homesharing host sites to ask them to follow suit and implement the proposals developed by IPPR.