New trade body claims short lets can ease housing crisis

A trade body representing short-term letting firms including Airbnb formed last week with the aim of “debunking myths” surrounding this fast-growing industry.

Critics of Airbnb and similar sites such as Airsorted and HomeAway argue that they are distorting the housing market and driving up rents.

Just last week, Labour MP Karen Buck launched a stinging attack in the House of Commons arguing that the growth of the industry was exacerbating the housing crisis. The MP for North Westminster, which is a hotspot for the likes of Airbnb, also claimed that neighbours of landlords using such sites “can find themselves waking up in a hotel annex but after all the hotel caretakers have gone home”.

The Short-term Accommodation Association is the industry’s attempt to defend itself against such claims and promote the sector.

Force for good

Its chair Merilee Karr, who founded premium short-term lettings group UnderTheDoormat, argues that the industry is a force for good.

“In the vast majority of cases, what happens in the industry is brilliant,” she says.

Attacking the caricature of the greedy landlord, she says most landlords are families and retirees who have “struggled through the financial crisis” and now have the chance to earn extra cash when they’re away. She even cites the example of one landlord who donates all their rental income from short-term lets to a cancer charity.

As for the argument that the industry is fuelling the housing crisis, Karr argues that proper enforcement of existing rules would overcome any issues created by “rogue landlords”.

It is illegal for landlords to let out their homes on short lets for more than 90 days a year without securing planning permission for change of use. However, one of the main criticisms of the sector is that buy-to-let landlords are flouting this rule by pulling their homes from the long-term lettings market in order to generate a higher income from holiday lets. The argument goes that this is driving up rents, particularly in parts of London where demand from tourists is high.

“The 90-day rule should work, but the issue is how councils are enforcing it,” Karr says. “My view is that they should be cracking down.”

Karr believes the best approach would be a hotline allowing neighbours to alert the authorities to rogue landlords. She dismisses Buck’s call for an online notification system requiring landlords to outline the dates their property is to be used for short-letting, saying “the last people to register would be the rogue landlords”.

Self-regulation

Furthermore, the industry has already made significant strides to self-regulate, she claims, pointing out that at the end of last year, Airbnb decided to limit users of its site to 90 days in London.

The move was welcomed at the time by the British Property Federation as “the missing link in ensuring that planning law is abided by in the capital”. Far from contributing to the housing crisis, Karr even argues the sector has a role to play in helping to solve it.

By letting out space that would otherwise lie empty, she argues that the industry is ultimately helping to ease pressure on housing.

“As tourism grows, it’s more sustainable to use assets that are underused rather than build more hotels on land that could be used for housing,” she says.

The industry could also help provide a leg-up for first-time buyers if mortgage lenders were to take into account potential income from short-term lets, she adds. “Imagine the impact for Londoners - especially those who have jobs where they are travelling a lot.”

The Short-term Accommodation Association intends to lobby lenders as well as the government and insurers on matters such as these “so the industry continues to evolve responsibly to the benefit of consumers”. It will also commission research to support its arguments and draw up an industry code of conduct to “raise the bar for our members and new market entrants”, says Kerr.

In the face of some fierce critics, the new trade body will have its work cut out resisting calls for tighter regulation.