Welcome to our world
I am highlighting the key elements in the accommodation space as well as the impact I believe it will have. It is extremely positive for consumers, asset owners and credible businesses and creates some very interesting opportunities for the industry to grow over the coming years on a level playing field, while minimizing risks and ensuring the right checks and balances are in place.
The UK leading in the Sharing Economy:
The government’s independent report and recommendations aim to transform the UK into a “global centre for the sharing economy”.
It is wonderful to see that the UK government recognizes the need to actively support this growing sector. With PwC predicting that the global sharing economy could be worth £230 billion in 2025, and the accommodation sector will equal the hotel industry in size within that period, there is a huge opportunity to play a leadership role in fostering its growth with the right degree of legislation.
Much of what the report recommends is strongly aligned with UnderTheDoormat’s approach, processes and values. I would like to highlight a few exciting elements which I believe will help ensure positive growth in the sharing economy accommodation sector and create a fair playing field with B&B’s and hotels, while protecting customers and ensuring credibility for our growing industry.
Health and Safety: The proposal to have minimum health and safety standards in place is something we have implemented from day 1 (completely aligned with what is proposed in the report) with all of our homeowners. We believe this is critical to ensure guests are safe, and also benefits the families whose homes we look after. We believe this is a great step forward as it avoids negative press for the sector from bad actors, and encourages homeowners and guests to work with reputable companies such as UnderTheDoormat who understands the requirements and work to warrant safety measures are in place.
Tax free income thresholds: What is very exciting are proposals from organizations like the IoD, where they are advocating a tax free allowance of 10,000 GBP for sharing economy services in addition to raising the threshold for the Rent a Room scheme which currently lets you earn up to a threshold of £4,250 per year tax-free from letting out furnished accommodation in your home to £6,960 GBP, in line with inflation since it was implemented. This will encourage more people to rent rooms through services like Airbnb or their whole home with UnderTheDoormat and takes away the barrier to understanding the tax implications of renting a home when the owner is away.
Insurance: This is seen by all involved as a key element to enabling the sharing economy. Its great to see that insurance companies are openly supporting policies that help protect both the renters and the guests. The proposed Trade association would also be able to broker deals across companies over time which could help to lower these costs, which is great for everyone involved.
ID Verification: The proposal is to extend the government verification scheme to private companies. This would help reduce risk in terms of verification of people through platforms. It would be UK wide initially and could later be extended to other countries over time. This would be a big win for all sharing economy participants and businesses to know who you are dealing with and avoid potential issues.
Rental properties: The recommendation is for the standard tenancy agreement template to be updated to remove the current explicit ban on subletting – tenants should be able to ask their landlords to sublet parts of their property for a period of time. This would mean that more people can participate in the sharing economy and benefit from it.
It is an exciting time to be a part of this debate and to help shape the direction. It is also exciting to see that the government seems to be supporting businesses like UnderTheDoormat as they understand the opportunity this poses not only for UK Plc, but also for consumers, entrepreneurs, and this emerging sector. These reports are very encouraging in terms of the overall direction, the opportunity this can pose, if implemented, for our current and future homeowners as well as for the growth of our business.
At the same time, two other important organizations have released reports: