The popular website Airbnb (along with a few others) has caused controversy around the world as its short lets to strangers’ website, allowing guests to stay in homes as lodgers, has morphed into facilitating more conventional lets.
In response to legislators in various jurisdictions, since 1st January 2017 Airbnb has begun limiting “entire home” listings on its platform to a maximum of 90 days occupancy in a calendar year.
The hosting website for these lettings of “entire home” listing, after accepting 90 days of bookings, Airbnb will automatically block user bookings for the remainder of the year – a counter on its website dashboard will show the total number of days accommodation has been booked, as well as the number of days still available for a booking.
The 90-day rule will only apply on advertisements for “entire home” listings, so advertising “shared rooms” or “private rooms” will not be affected.
In London the move to actively enforce regulations on the 90 day rule is as a result of increasing pressure from both the Greater London council and the global hotel lobby.
The rules have been introduced in a number of major cities around the world including the home of Airbnb, San Francisco, plus Amsterdam. In London, it is for the specific reason that demand for affordable housing in the capital dramatically outstrips supply pushing prices out of reach of the majority of young workers and families, dubbed by the media: “generation rent”.
Buy-to-let investors looking to maximise returns on their London portfolios have been increasingly tempted by higher yielding short-term lets over more traditional long-term assured shorthold tenancies (ASTs). This is resulting in even greater shortages of affordable rental stock for housing the city’s permanent residents. Instead it is servicing temporary residents, mainly tourists and business travellers – central London flats could become reminiscent of one large hotel if the trend were allowed to reach its ultimate conclusion.
Since the 1970s, London property let for less than a period of 90 days, which is the legal definition of a “short-term” let, required planning consent (class “C1″). However, with the growth of on-line letting through websites like Airbnb it is easy for landlords (and indeed subletting tenants) to flout the law.
The response has been the introduction, in the May 2015 Deregulation Act, in order to embrace the “sharing economy” philosophy (an economic philosophy which asserts that goods or services should be are shared between private individuals, either free or for a fee, typically by means of the Internet) to allow all London residential property owners to rent out their property out on a short-term basis, provided it is permitted within their lease, for up to 90 days in a calendar year, without any need to apply for planning permission.
People now wishing to rent their property out “sort-term” for more than the permitted 90-days must apply for the required planning consent. The reality is, however, that it is highly unlikely to be granted to a residential property in central London due to the precedent it would set. Airbnb said it will require proof of permission from the council from anyone who wishes to rent a property out in London for more than 90 days.
A spokesperson from Airbnb has said: “…we are announcing a change to our platform that will introduce new and automated limits to help ensure entire home listings in London are not shared for more than 90 days, unless hosts confirm they have the required permission to share their space more frequently,” it wrote. “This will make it easier for hosts in London to act in the best interests of everyone in the city.”
Airbnb users need be aware of likely restrictions within their lease that govern the use of their property. Tenants and leaseholders will often face restrictions on letting and subletting without the prior consent of their landlord or freeholder, insurance policies may be invalidated by the unauthorised practice, as well as there being consequences with mortgage contracts.
For those using Airbnb or similar websites for “short lets” of more than the 90 days will need the relevant planning consent, but this, if obtained, will usually mean a change in taxation class from private dwelling to business use – it will result in a higher form of taxation as it will then be classified as a commercial property.
A new online letting agent Lavanda has launched a Service Let offering TO tap into WHAT IT SEES AS “the way people want to live today,” home-sharing and serviced living.
The multi-millionaire founder of Rightmove and former chief executive of Countrywide, Harry Hill, has recently joined the start-up lettings company Lavanda as its chairman. Lavanda aims to take advantage of the demand for short-term lettings in London and place short let tenants into temporary void long-term rental properties.
The firm says it enters into contracts with landlords, agreements which allow Lavanda to fully manage the properties and permitting them to sub-letting by the short-term tenants.
Short-term lettings and the London Market https://t.co/qiFgb7yU9a
— LandlordZONE (@LandlordZONE) April 7, 2017