Short-term lets provide plenty of opportunities for letting agencies and landlords, but PayProp believes that this fast-growing market could benefit from regulation.
The lettings payment automation provider says that professionalisation is needed for short lets in order to provide the necessary protection for all stakeholders.
Using ideas taken from the traditional lettings market, we could see a reduction in the number of negative experiences and see more people benefit from the availability of short-term lets.
Huge growth over a short period
In recent years the short-term lets market has seen rapid growth. Tenants enjoy the flexibility it offers, while landlords are attracted to the high yields it can provide.
The Chartered Institute of Housing has reported over 77,000 short-term lets were listed on Airbnb in London alone during April 2019 and over 10,000 in Edinburgh.
Neil Cobbold, Chief Operating Officer of PayProp UK, says: “The fast growth of this market shows there is a clear appetite for this type of accommodation, but short lets could benefit from regulation in order for the sector to be sustainable.
“There is currently no mandatory regulation of short lets, which is concerning when you consider that landlords now have to comply with 156 regulations to let a property long-term – a rise of 32% in just nine years, according to the Residential Landlords Association.”
Horror stories show need for short-term lets market regulation
Several high-profile cases involving rogue operators have occurred recently, in which landlords, tenants and agents could have been protected with the right regulation.
BBC One’s Inside Out recently focused on the extent of illegal sub-letting via short-term lets websites.
In particular, a London agency discovered tenants checking a family into an apartment it was managing for a client. Once investigated, it was revealed that the flat had over 70 reviews on Airbnb.
Meanwhile, Lord Alan Sugar has claimed that scammers used images of one of his London properties to create a fake Airbnb listing, costing a group of American tourists $600.
Cobbold comments: “The number of stories of short-term lets being mismanaged or used to scam people appears to be growing.
“The unregulated nature of the sector is likely to be a contributing factor to this as fraudsters see a fast-growing market where there are opportunities to make large sums of money quickly and very few rules to comply with.”
First steps taken, but further action needed for the short-term lets market
In response to this negative press, a new industry-specific trade body was recently launched.
The Professional Host Alliance proclaims that its mission is to ‘accelerate the professionalisation of a sustainable, global short-term rental sector and build trust in the home-sharing economy’.
Cobbold adds: “The launch of a trade body for short-lets firms is welcome and hopefully it can build momentum by signing up some of the industry’s biggest names.
“Introducing more rules for short-term let landlords and agents to follow, as well as minimum standards for hosts to meet, could represent the next steps of progress.
“Managing short-lets undoubtedly provides letting agencies with a huge opportunity, but there need to be more parallels with traditional private rentals for this new revenue stream to be ultimately safe and successful.”