What home sharing means for London
Last year short term letting was made easier in the capital, and it is turning out to be both good and bad for communities
Sharing economy websites are enjoying significant business growth, with home sharing platform Airbnb having a presence in 34,000 towns and cities in 190 countries. The UK government last year legislated to facilitate short term letting, giving Londoners the freedom to rent out their homes for up to 90 days a year, without requiring planning permission or registration.
But elsewhere in the world, the growth of short term letting has prompted a very different response. Berlin and San Francisco are among the city authorities that have taken action to control the rise of home sharing, in response to concerns about negative impacts on local housing markets and communities. Similar concerns have been voiced in Ireland, and Dublin City Council recently ruled that planning permission for change of use to a holiday let was needed for an apartment in its Temple Bar area.
The sharing business
While the origins of home sharing may lie in renting out a spare bedroom for a few weeks over the summer holidays, many argue that it is now being used by commercial operators to rent out homes, skewing the rental market and sidestepping regulations, in areas such as fire safety, that are designed to protect home occupants.
"A large part of the sharing economy has been invisible. Regulations are in place for rented homes, but they are not enforceable for these short term lettings. These properties are off the radar," says a spokesperson for hospitality industry body, the British Hospitality Association (BHA).
There are also concerns that short term letting can take much needed longer term rental housing stock out of the marketplace because, says the BHA spokesperson,"homeowners can get more income from these short lets than they can from renting longer term." The BHA spokesperson points to data on the activist website, Insideairbnb.com, which indicates that up to half of London’s 42,000 listings are entire homes, rather than spare bedrooms.
The apartment in Temple Bar that prompted Dublin City Council’s intervention came to wider attention when it was put on sale with an advertisement that promoted its £66,000 income from short term letting, for around 47 weeks of 2015, alongside its £356,000 sale price. That is untypical, say operators, Airbnb stating that the average host shares or lets their home for 46 nights a year, earning around £2,000.
An analysis of Airbnb properties in London by scientists at University College London, Boston University and Bell Laboratories paints an evolving picture of London’s short term lettings sector. The research looked at where homes and rooms to rent are located, alongside socio-economic data.
The study found that whole homes to rent were most common in the city centre, like conventional hotels, while rooms to rent extended across the whole of London fairly uniformly. Over the years 2012 to 2015 analysed for the study, the researchers saw an evolution in those renting out whole homes.
In 2012 Airbnb homes were located in areas close to the city centre. "It was wealthier, more tech savvy homeowners who became hosts," says Giovanni Quattrone, research associate at University College London and one of the study’s co-authors. "But over time it evolved out to different and poorer parts of the city, where hosts were looking for extra income."
In these areas, short term letting could be beneficial, argues the study. "It could help to spread the economic benefits of tourism to different areas of a city," says Quattrone.
But the research highlights a need for data and regulation to help in managing impacts on communities.
Its research recommends:
•Right to rent: Local authorities would give permits for short term rental. Permits would be transferable, so a homeowner has the right to operate for a given time period, but can sell their right to others if they don’t participate. Sharing rights could be marketed via a website with revenues generated going to the council. This system would need to consider such factors as local economic development, sustainable tourism and the need to avoid concentrations of short term rents.
•Data for enforcement: A city needs an eco-system for data sharing. By matching Airbnb data with census data the researchers found rooms are commonly offered in high rental areas, which suggests rental agreements on sub-letting are being broken.
This study, published in a paper called, Who benefits from the sharing economy of Airbnb?, is the first stage in ongoing research, and the researchers are now completing a follow-up project looking at five US cities.