Hundreds of thousands of London rental homes could disappear from the market in the coming years as landlords switch to offering Airbnb-style holiday apartments, research has revealed.
Housing data specialist Propalt analysed 2,800 short-term lets available in London over the past three years and found that more than a fifth previously had longer-term tenants.
Further analysis by the firm uncovered more than 10,000 homes owned by those landlords who it could see had begun transitioning to holiday-style rentals.
"As tenancies become available, these properties won't go back on the long-term market," predicted Propalt co-founder Kieran Slinger.
Extrapolating the data across the booming Airbnb-style market means there could be "hundreds of thousands of properties" lined up for the switch, he added. Landlords are tempted from the traditional model to online night-by-night availability due to the potential for greater returns and lower fees, he added.
"It is a growing trend and it is going to significantly shrink the pool of long-term lets available."
Meanwhile data analysis from estate agent Benham & Reeves found a steady increase in the amount of short-lets available on the market over the past year specifically through the Airbnb portal.
The rapid growth of Airbnb in the capital
Estimated number of short-term lets available in London
Source: Benham & Reeves analysis of Inside Airbnb data
Propalt head of data Yujie Gong said: “The level and voracity of switching is certainly something we are monitoring. There is pattern of long-term rentals finishing and new adverts appearing for the same properties within 60 days.
"We would expect to see more properties and property owners following this path unless they can see a route to similar returns in the long-term lettings market. It’s certainly something agents should be thinking about in 2024.”
Marcus Dixon, director of residential research at property specialists JLL, said a number of landlords moved across to mini-let platforms during the pandemic as demand for staycations soared.
He added: "More recently, higher mortgage costs and the return of visitors to London means some landlords may have been tempted to switch across to the likes of Airbnb."
Dixon said there was some hope of a gradual rebalance, however.
"Past evidence suggests that this can sometimes be a short-term switch as landlords often then get tired of the additional short-let obligations and switch back again.”
Meanwhile, a number of short-term letting platforms including Airbnb this week signed a deal to share data with the Office for National Statistics.
By the spring, anonymised and aggregated figures on guest numbers and length of stay will be published for the first time as ministers look to get a better understanding of the industry.
"This agreement marks a pivotal moment for short-term lets in the UK, demonstrating [the sector's] commitment to responsible data sharing with public authorities," said the Short Term Accommodation Association.
"We expect this data to illustrate the positive impact that short-term lets bring to the UK tourism economy, while also empowering public authorities with the insights they need to make informed, data-driven policy decisions, ensuring a balanced approach that benefits both local communities and the broader economy.”
Amanda Cupples, Northern Europe general manager at Airbnb, added: “We want to help strengthen communities, support tourism and boost income of local families.
"This data will be a vital resource for authorities at all levels to better understand short-term letting activity in their communities and capture the positive benefits of tourism.”
Cost of living
An Airbnb spokesperson pointed out in response to the Propalt data that the typical London listing on its portal was rented for just 43 nights a year.
"Four in ten hosts say they use the extra income to help them afford the rising cost of living," they added.
"Airbnb takes housing concerns seriously, and has enforced restrictions on short-term lets in London for more than five years. We have also long called for national regulations to be introduced and look forward to an update on the government’s consultations in due course.”
Key figures this summer demanded government action on holiday lets after it emerged that the number of second homes in London grew during the course of the pandemic.
Information gathered by campaign body Generation Rent showed that councils in the capital had registered more places as furnished but non-primary residences in October 2022 than in the same month in 2019 — despite Covid subduing overseas travel and creating a race for space that lessened domestic interest.
Meanwhile it emerged this month that asking rents across the capital had risen by almost a third since the height of the pandemic amid a crippling housing shortage.