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The Rental Revolution: What the Sharing Economy is doing to the PRS?

Authors:

Abstract

As the way in which we do business changes, the ‘sharing economy’ is on the rise in the UK. More and more people are now using sites such as Airbnb to rent out homes as an alternative to staying in a hotel, with more than 33,000 listings in London alone. This research report explores the extent of the use of Airbnb and its impact on the private rented sector. Two sources of data are presented. Firstly, to understand the use of Airbnb in London we conducted an analysis of Airbnb listings from insideairbnb.com. Secondly, we used a survey of landlords to explore their experiences of tenants who had sub-let through Airbnb or a similar platform. The findings highlight the negative impact of this technological revolution. From 33,715 Airbnb listings in London, 65% were available for more than 90 days per year. In addition, 64% of entire homes/apartment listings were available for more than 90 days per year (11,296 listings), with an estimated annual revenue of £144,227,328.
The Rental Revolution: What the Sharing
Economy is doing to the PRS?
Tom Simcock and Dr David Smith
Residential Landlords Association
May 2016
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About the Residential Landlords Association
The Residential Landlords Association represents the interests of landlords in the private
rented sector (PRS) across England and Wales. With over 23,000 subscribing members, and
an additional 16,000 registered guests who engage regularly with the association, the RLA is
the leading voice of private landlords. Combined, they manage almost half a million
properties.
The RLA provides support and advice to members, and seeks to raise standards in the PRS
through our code of conduct, training and accreditation and the provision of guidance and
updates on legislation affecting the sector. Many of the RLA’s resources are available free
to non-member landlords and tenants.
The association campaigns to improve the PRS for both landlords and tenants, engaging
with policymakers at all levels of Government, to support our mission of making renting
better.
About the Authors
This report is written and researched by Tom Simcock and Dr David Smith of the Residential
Landlords Association.
Tom Simcock MBPsS is the Research and Information Officer for the RLA. Tom’s expertise
lies in understanding change in society. For the past 3 years, he had been researching the
changing roles of Fire and Rescue Service Employees. Tom holds an M.Sc. degree from the
University of Manchester, and a B.Sc. degree from the University of Chester.
Dr David Smith is the Policy Director at the RLA and a Partner at Anthony Gold Solicitors.
David obtained his degree and doctorate from the University of Wales, Aberystwyth in
International relations before re-qualifying as a lawyer. He is known for his expertise in
residential landlord and tenant law and has advised the Welsh Assembly, local government,
and numerous landlords and tenants of all sizes.
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Contents
Executive Summary .................................................................................................................... 4
Introduction ............................................................................................................................... 6
Section 1: Analysis of Airbnb Listings ......................................................................................... 9
Section 2: Survey of Landlords ................................................................................................. 11
Section 3: Landlord Case Studies ............................................................................................. 13
Section 4: The Legal Position ................................................................................................... 15
Conclusion ................................................................................................................................ 17
References ............................................................................................................................... 18
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Executive Summary
As the way in which we do business changes, the ‘sharing economy’ is on the rise in the UK.
More and more people are now using sites such as Airbnb to rent out homes as an
alternative to staying in a hotel, with more than 33,000 listings in London alone.
This research report explores the extent of the use of Airbnb and its impact on the private
rented sector. Two sources of data are presented. Firstly, to understand the use of Airbnb in
London we conducted an analysis of Airbnb listings from insideairbnb.com. Secondly, we
used a survey of landlords to explore their experiences of tenants who had sub-let through
Airbnb or a similar platform.
The findings highlight the negative impact of this technological revolution. From 33,715
Airbnb listings in London, 65% were available for more than 90 days per year. In addition,
64% of entire homes/apartment listings were available for more than 90 days per year
(11,296 listings), with an estimated annual revenue of £144,227,328.
Not only is this unlawful in relation to the current planning regulations, it is removing
housing from the market, while individuals are capitalising on the lack of housing supply. A
more striking finding was that 39% of entire homes/apartments were multi-listings (where
the hosts have more than one listing), and 78% of these were available for more than 90
days. This further confirms the way in which businesses are capitalising on this change and
preventing those in need of homes from securing a place to live.
Furthermore, from our survey of landlords we identified that 15% had experienced their
tenants sub-letting properties without permission on Airbnb or a similar platform. Of those
properties that were affected, 48% were in London.
The majority of landlords (34%) discovered what was happening when they visited the
property, 23% when complaints were made by neighbours and 18% by checking online.
Others discovered what was happening when contacted by a sub-letter or the police.
Many of the landlords raised concerns over the increasing costs of repairs and the legal
implications of illegal sub-letting, which could leave them in breach of mortgage conditions.
The case studies of landlords included in section 3 of this report demonstrate the serious
consequences of tenants sub-letting without permission, with landlords losing thousands of
pounds to lost rent and repair bills.
We at the RLA are calling on the Government and the London Mayor to review the use of
Airbnb and other similar platforms and the impact on housing affordability and landlords.
The sharing economy is allowing individuals to profit on the long term use of property on
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Airbnb and is removing a significant amount of homes from the market. There are also
concerns worldwide over safety and the potential for fraud when using these platforms.
Airbnb itself takes no responsibility for any of the illicit use of its services. What is clear is
that this is a significant issue that warrants further action, and we recommend an
assessment of the impact on housing affordability and rents in London, education of tenants
on the issue of sub-letting, and education of landlords on the issues surrounding the sharing
economy and breaches of licensing, mortgages, and insurance.
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Introduction
Over the last decade there has been a technological and social revolution in the way we
purchase and pay for goods, with a transformational change towards sharing products
(Brand & Rocchi, 2011). One particular success story has been Airbnb, which has
transformed the travel and short term rental industry.
The seeds of the idea were sown in San Francisco in 2007, when two graduates advertised
their apartment to conference delegates seeking to avoid high hotel costs (Guttentag,
2015). Within two years, Airbnb was launched and has grown rapidly worldwide with
millions of nights booked in shared rooms and whole apartments (Botsman & Rogers, 2010).
Airbnb (2016a) itself claims that there have been over 60 million guests who have used its
platform worldwide.
Airbnb (2016a) describes itself as “a trusted community marketplace for people to list,
discover, and book unique accommodation around the world”.
Airbnb does not employ the ‘hosts’ or own the apartments/houses offered by them. It is an
online platform that allows home owners to offer spare rooms or their entire property as a
short-term holiday let, and collects a small percentage of the money paid (Oskam & Boswijk,
2016). These properties range from “a flat for a night, a castle for a week, or a villa for a
month … in more than 34,000 cities and 191 countries” (Airbnb, 2016a).
Hosts are able to advertise three different types of listing; shared rooms, private rooms, and
entire homes/apartments (Airbnb, 2016b).
In shared rooms guests share their bedroom with other travellers, working in a similar way
to a hostel. In private rooms the guest has their own bedroom but shares other spaces such
as bathroom and kitchen. Travellers can also rent entire homes/apartments, offering “a
home away from home with complete privacy” (Airbnb, 2016b).
Guttentag (2015) reports that Airbnb claimed in 2012 that 57% of listings were entire
homes/apartments. Airbnb does not generally release data publicly, yet in the past it has
had to comply with legal requests for data from the New York States Attorney
(Schneiderman, 2014). To get information we have searched other sites, such as
insideairbnb.com, where data has been pulled from the Airbnb listings for particular cities
(InsideAirbnb, 2016a).
The rise of Airbnb and other similar platforms has caused significant disruption to the tourist
accommodation economy worldwide (Bock, 2015). It can be seen as a positive force, driving
change to benefit consumers and reduce unnecessary regulation (Edelman & Geradin,
2016). However, there have been concerns worldwide about safety, the provision of
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services to the disabled and other vulnerable groups and the loss of affordable housing from
the market (Schneiderman, 2014; Streitfeld, 2014). In New York, Schneiderman (2014, p. 2)
analysed Airbnb bookings between 2010 and 2014 and found:
Short-term rentals experienced explosive growth, with revenue expected to exceed
$282 million
Most short-term rentals booked in New York violated the law
Commercial users accounted for a disproportionate share of private short-term
rentals by volume and revenue
Private short-term rentals displaced long-term housing in thousands of apartments
The findings of the New York report demonstrate the impact of this transformational change
in tourist accommodation, especially in the removal of available housing for long-term
renters. However, this problem is not confined to New York.
It was recently reported that in Berlin Airbnb and other online platforms have reduced the
amount of properties available to rent long-term, leading to increased demand and rental
prices (Khurshid, 2016). As a result, Berlin has banned the renting of entire apartments
through online short-term rental sites (Payton, 2016).
Paris is another city facing the pressure caused by the popularity of Airbnb. Paris is the most
popular city on Airbnb with around 60,000 listings (Coldwell, 2015b). Airbnb has now come
under pressure from Paris City Hall to warn hosts that are operating illegally to stem the
detrimental impact on the availability of housing in the city (Coldwell, 2016).
While the use of Airbnb has grown in London since its inception, it was unlawful until May
26th 2015 due to the Greater London Council (General Powers) Act 1973, s25 stipulating that
the use of residential property for lets of less than 90 consecutive nights was a change of
use which required planning permission (Coldwell, 2015a; InsideAirbnb, 2016b).
However, anecdotal evidence has emerged of tenants routinely sub-letting rooms and
entire properties on Airbnb in London, potentially removing affordable housing from the
market (Ferguson, 2016; Residential Landlord Assocation, 2016).
Airbnb has also been used to commit fraud against prospective tenants, with guests renting
out a property on Airbnb and then posing as landlords/letting agents to ‘fleece’ tenants out
of deposit and rent (Collinson, 2014).
Nevertheless, in the Spring Budget of 2016 George Osborne announced a tax break of
£1,000 to support the sharing economy (Hickey, 2016), potentially supporting the increase
in the use of Airbnb by tenants and home-owners. It remains uncertain whether all those
making profits from Airbnb are in fact paying their full measure of tax.
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Airbnb currently refuses to accept responsibility for any form of illicit use of its services. It
requires those advertising on its platform to warrant that “any Listing you post and the
booking of, or a Guest’s stay at, an Accommodation in a Listing you post (i) will not breach
any agreements you have entered into with any third parties, such as homeowners’
association, condominium, lease or rental agreements, and (ii) will (a) be in compliance with
all applicable laws”. While it makes no specific efforts to check that advertisers are
complying with this warranty it clearly considers that this gives it complete cover against any
legal action.
The aim of this report is to collect quantitative and qualitative data to understand and
explore the full extent of the use of Airbnb in London and tenants sub-letting the property
through Airbnb or similar sites. In order to address these aims, a mixed-method study was
designed with two phases, firstly, data from insideairbnb.com was analysed for London to
provide an overview of the use of Airbnb in London. The findings of this phase are reported
in section 1. The second phase of this study utilised a mixed-methods survey design to
explore the experiences of landlords who have discovered their tenants subletting online.
This survey was distributed to landlords by email and social media over the period of 2
weeks. The findings of the survey are reported in section 1. A number of case studies were
developed from the responses to the survey and are reported in section 3. Section 4 sets
out the legal position and potential risks to landlords.
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Section 1: Analysis of Airbnb Listings
There are an estimated 33,715 Airbnb listings in London (Feb 2016, source:
insideairbnb.com)
o Estimated 17,625 entire property/flat listings
o Estimated 15,607 private room listings
o Estimated 483 shared room listings
52.3% of listings are entire property/flat listings
46.3% of listings are private room listings
1.4% of listings are shared room listings
Average price per night (all listings) is £93
o Entire homes/apartments: £137 per night
o Private room: £51 per night
o Shared rooms: £35 per night
Estimated occupancy is 89 nights per year for all listings
o Entire homes/apartments: 91 nights per year
o Private room: 87 nights per year
o Shared room: 82 nights per year
Estimated income per month is £639 (all listings)
o Entire homes/apartments: £918 per month
o Private room: £339 per month
o Shared room: £179 per month
Availability
o 65.3% of listings are available for more than 90 days per year (22,012 listings
with high availability)
64.1% of entire homes/apartments are available for more than 90
days per year (11,296 listings with high availability)
66.4% of private rooms are available for more than 90 days per year
(10,360 listings with high availability)
73.7% of shared rooms are available for more than 90 days per year
(356 listings with high availability)
Listings per host
o 37.8% of listings are multi-listings (where hosts have more than one listing a
total of 12,744)
39.3% of entire homes/apartments are multi-listings (6,934 listings)
35.7% of private rooms are multi-listings (5,576 listings)
48.4% of shared rooms are multi-listings (234 listings)
o 2,803 listings are where hosts have two or more other listings (8.31%)
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Total revenue per year:
o Estimated 24.5% occupancy (all 33,715 listings): £258,526,620
o Only including those recent/frequently booked (13,419 listings estimated
51.3% occupancy): £212,879,016
o Revenue for entire home/flat:
Estimated 25% occupancy (all 17,625 listings): £194,157,000
Only including those recent/frequently booked (7,218 listings
estimated 50.9% occupancy): £159,373,440
Only including those with high availability (11,296 listings, 28%
occupancy, available for more than 90 days per year), estimated
revenue: £144,227,328
Entire home/flat listing analysis
o 6,934 entire home/flat listings are multi-listings
Of these, 5,410 listings (78% of these listings) have high availability
(available for more than 90 days per year)
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Section 2: Survey of Landlords
Total number of responses: 713
15% of landlords reported that they had experienced tenants advertising a property
or room on Airbnb or other similar site without asking for permission
Most of the properties were located in London (48%), followed by the North West
(9%) and the South East (9%)
The principle reason for landlords finding out about this activity was through visiting
the property (34% of landlords)
The next reason was that neighbours had reported or complained about the sub-
letting (23% of landlords)
18% of landlords found the sub-letting adverts on Airbnb or other sites
This was followed by the prospective sub-tenant contacting the landlord (7% of
landlords)
32% of landlords evicted their tenant as a result of the sub-letting
A large number of respondents highlighted concerns over the insurance issues from
tenants sub-letting the property and how sub-letters/guests would not be protected
if there was an incident. For example, one landlord commented: “I feel it should be
widely advertised that with invalid insurance tenants are not protected should an
incident occur.”
Furthermore, the majority of landlords raised concerns over the eligibility of the sub-
tenant/guest to rent, as the landlords were unable to ‘check out’ prospective
tenants, with concerns over the recent ‘Right to Rent’ legislation. Landlords also
feared that criminals could be using their property without a record of them staying
there.
Landlords reported that tenants sub-letting the property on Airbnb had seen
increased damages, increased repair costs, tenants refusing to continue pay rent
when confronted and tenants even making significant alterations to the property to
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allow sub-letting. For example: “To facilitate his illegal letting he made changes to
the property. As soon as I started taking action against the tenant he stopped paying
rent. The action took four months and ending up costing me around £7,000 in
damages and lost rent.”
Landlords further raised concerns over tenants using these sites to ‘scam’
prospective tenants/guests, as discussed by one landlord: “He [the tenant] told all
the people who answered his ad that he was the owner of my house. They wouldn’t
have known any different. They lost all their money: Two months’ rent in advance
and one month’s rent.”
Landlords were also fearful of the legal implications of this activity, with many raising
concerns over HMO licensing. One landlord said: “It is unbelievable that it is always
the landlord to blame. I rented a house to two people and I had eight in total, and the
council suspected that I had an illegal HMO. Really nothing but stress and problems
to remove the tenants, with the house left as a wreck.” A further landlord said: “It
could put me in contravention of Landlord Licensing regulations, cost me money as
well as my reputation, and potentially my livelihood. In the case of my one-bed flat,
the rogue tenant overcrowded the property by having whole families stay in the
bedroom while he, his girlfriend and baby kipped down in the living room.”
("Caradon DC v Paton," 2000)
("Greater London Council (General Powers) Act," 1973)
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Section 3: Landlord Case Studies
Please note: All names changed to protect the identity of the landlord. These case studies
are derived from the responses provided to the survey of landlords.
Case 1: David
Property Location: London
David recently experienced a tenant sub-letting the property through Airbnb. In this
particular instance, David only realised that the sub-letting was occurring when he visited
the property for an inspection and discovered the tenant had converted the living room into
a bedroom. David was forced to start the eviction process, and contacted the RLA for advice.
In conjunction with advice and support from TDS, David was able to claim losses due to early
eviction from the deposit even though the tenant, who was clearly a seasoned sub-letter,
had to be convinced that the landlord was legally able to do so.
Case 2: Mark
Property Location: North West of England
Mark recently experienced tenants sub-letting. In this instance, the tenant had abandoned
the property owing rent and a sub-let tenant was residing in the property. Mark allowed the
tenant to continue living there until he found another place. However, he [the sub-tenant]
left the place in a disgusting state and told him that he was lucky as he could have made
things worse for him.
Case 3: Carly
Property Location: London
Carly found out that a tenant had been sub-letting the property on Airbnb. Carly only
discovered this was occurring when the tenant refused her access. Once Carly was able to
enter, she found that the tenant had made changes to the property. The landlord was
forced to take action against the tenant, with an attempt to evict him. However, as soon as
she started to take action, the tenant refused to pay anymore rent. In total the action took
four months and ended up costing Carly around £7,000 in damages and lost rent.
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Case 4: Lisa
Property Location: London
Lisa experienced a tenant sub-letting the property. This activity was brought to her
attention by the neighbours, who said they had seen different people entering and exiting
the apartment during the day who were not the usual tenants. Moreover, the tenants sub-
letting led to a couple of instances when police were called to deal with people in the
apartment physically fighting over who should do various chores. Lisa was left no option but
to evict the tenant with a Section 21 notice. During conversations with the tenant over this
issue, the now ex-tenant boasted that he was making a lot of money sub-letting the two
bedrooms and had put a bed in the lounge for himself. He even had business cards that he
gave to Lisa. During the eviction process, the ex-tenant continued to argue with the landlord
over the deposit being used to repair damages caused to the property through the sub-
letting.
Case 5: Alexandra
Property Location: London
In the last 12 months, Alexandra experienced tenants sub-letting her property online
through various sites including Gumtree. Alexandra only found this out when she was
contacted by a prospective sub-tenant who had got the number from the neighbour. This
prospective sub-tenant had turned up to collect keys for the property and four or five other
groups of other sub-tenants had turned up at the same time. Alexandra discovered that the
tenants had let the entire property and had taken a £1,500 deposit from each group of sub-
let tenants. Alexandra had to contact the police, but the original tenant had vanished and
left the property ‘wrecked’.
The damage included: a key superglued into lock, locks missing off the inner doors, the
backdoor forced off its hinges, a missing window, damaged furniture and general dirtiness.
This was not the only problem Alexandra faced. The tenants were already in arrears with
their rent, having missed a number of payments, and Alexandra discovered that one half of
the couple had been using the garden shed to sell drugs. Overall, Alexandra was faced with
a repair bill just over £7,000, rent arrears, and over 14 days of work to fix the damage to the
property.
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Section 4: The Legal Position
Landlords whose tenants sub-let may find themselves in breach of a number of provisions.
Many of these will also apply to the individual tenants who elect to sub-let.
Planning
Outside Greater London there is no specific planning restriction on short letting and so there
is little control on short term lets. Inside Greater London the Greater London Council
(General Powers) Act 1973 originally stated that letting of a property for less than 90
consecutive nights was a change of use for which planning permission would be needed.
While not a criminal offence in itself, a breach of planning in this way would expose the
person carrying it out to the risk of a planning enforcement notice being served. Breach of a
planning enforcement notice is an offence punishable by fines and the recovery of money
earned in breach of such an enforcement notice. The Deregulation Act 2015, s44 relaxed the
terms of the 1973 Act so that individuals could let property in which they were the council
tax payer for periods of less than 90 consecutive nights provided that the short lets, taken in
aggregate, did not amount to more than 90 nights in any one year. Therefore, this would
allow occasional short letting but routine short letting would still be a breach of planning
control.
Lease Terms
It is normal for tenancy agreements as well as for the longer leases of flats and apartments
to have restrictions prohibiting sub-letting and also prohibiting the use of the premises for
business purposes. The Courts have long been of the view (see, for example Caradon DC v
Paton (2000) 3 EGLR 57, CA) that routine short term letting may be a breach of the
prohibition on sub-letting depending on the nature of the occupancy agreement but that
such a use is always a breach on the prohibition against business use. This would put the
individual tenant who was sub-letting in breach of his lease to the landlord. However, where
the landlord was themselves a leaseholder, of a flat for example, the landlord would be in
breach of his superior lease and would risk the loss of his property.
Licensing
Properties in multiple occupation (known as Houses of Multiple Occupation or HMOs) are
subject to additional controls as to standards and condition which do not apply to ordinary
rental property. Breach of these is a criminal offence punishable by a fine which is
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unlimited. Landlords who have tenants who choose to sub-let may find that the property is
considered an HMO and that they are subject to the management requirements associated
with them. Some local authorities have licensing requirements for HMOs and for other
property types as well. These licences usually restrict the number of households in the
property. Landlords may find that the unauthorised sub-letting by tenants means that they
should have had a licence or that the terms of a licence they hold has been breached. While
a landlord would have a defence to any such prosecution they will still face the added stress
of a criminal investigation and the need to prove that they were unaware of the sub-letting
by their tenant.
Insurance and Mortgages
Most insurance and mortgages have prohibitions on business use. Any tenant using the
property for short letting would put the landlord in breach of these clauses. This would
mean that the insurance would be unlikely to cover damage to the property and there
would be a risk of the landlord’s mortgage lender terminating the loan agreement.
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Conclusion
The findings of this report clearly highlight the potential negative impacts of Airbnb and
other similar online platforms. The analysis of the insideairbnb.com data demonstrated that
around 64% of the entire homes/apartment listings were available for more than 90 days,
with an estimated annual revenue of £144,227,328. This is a potential 11,296 homes that
are unavailable on a long-term basis. Yet, this is currently unlawful in Greater London
without planning permission.
Moreover, we argue that this could be used by criminal landlords to rent out properties and
bypass essential regulations that protect tenants, such as protecting deposits or safety
regulations.
It is imperative that the Mayor of London, the London Assembly and Borough Councils use
all of their powers to protect tenants and ensure Airbnb is not misused, ensuring properties
are available to those who need a home in London.
Our evidence shows 15% of landlords have experienced tenants sub-letting their property
on Airbnb or other similar sites. Not only is this a breach of tenancy, this places
unacceptable risk on the landlord, who could face significant issues with their mortgage
lender or insurance company if there was a problem. Moreover, the sub-letting may infringe
on HMO licencing and ‘Right-to-Rent’ checks, as landlords will not be able to check if a sub-
tenant is legally able to rent the property.
Alongside this issue, this may lead to sub-tenants who turn to squatters, as evidenced in one
of our case studies. It is overwhelmingly evident that there is extra cost being incurred by
landlords due to the increased wear and tear on properties and that significant damages
often need to be repaired.
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... This research builds upon the previous Residential Landlords Association (RLA) report 'The Rental Revolution: What the Sharing Economy is doing to the PRS?' and sets out to explore the explosive growth in Airbnb listings. In the first report, Simcock and Smith (2016) identified that 64% of entire home/apartment listings were available for more than 90 nights per year with an estimated annual revenue of £144,227,328. It was argued that this is removing a significant amount of housing supply, restricting the amount of properties available to families and workers, and potentially pushing up rents. ...
... Furthermore, 64% of entire home/apartment lists were available for more than 90 nights per year bringing in an estimated annual revenue of £144,227,328. We argued that its usage was removing a significant amount of housing from the market, especially when London is suffering from a 'housing crisis' (Simcock & Smith, 2016). ...
... Yet a further disturbing finding was that 39% of entire homes/apartments were multi-listings (where the host offers more than one property) and 78% of these were available for greater than 90 nights per year. It was argued that businesses were capitalising off the rising demand for short term lets and removing the opportunity of housing for those who need a property to live in (Simcock & Smith, 2016). We also discovered from a survey of landlords, that 15% of landlords had experienced issues with sub-letting by tenants. ...
Technical Report
Full-text available
‘Sharing is caring’ but is this the case with the rise of the sharing economy? Airbnb is a key facet of the sharing economy and is growing significantly worldwide. There are now more than 42,000 listings in London alone. This research builds upon the previous Residential Landlords Association (RLA) report ‘The Rental Revolution: What the Sharing Economy is doing to the PRS?’ and sets out to explore the explosive growth in Airbnb listings. In the first report, Simcock and Smith (2016) identified that 64% of entire home/apartment listings were available for more than 90 nights per year with an estimated annual revenue of £144,227,328. It was argued that this is removing a significant amount of housing supply, restricting the amount of properties available to families and workers, and potentially pushing up rents. This research investigates the growth in the usage of Airbnb between February 2016 and June 2016. From the analysis of the data it was found that there had been a substantial growth of 27% for the number of listings in London. Moreover, the number of entire home/apartment listings had increased by 24% to 21,861. 61% of these entire home/apartment listings were found to be available for more than 90 nights per year, and an increase from 11,296 listings in February to 13,320 in June. This is an 18% increase in the number of listings available for more than 90 nights over a period of 4 months. Furthermore, these highly available home/apartment listings were let on average for 98 nights per year. This finding shows that the number of listings possibly not adhering to planning regulations has increased dramatically and could be removing the supply of homes. Furthermore, there is increasing concern over the commercialisation of the listings on Airbnb, with an increase of 38% in the number of listings classified as multi-listings (i.e. where the host has more than one listing). We at the RLA are calling on the Government and the London Mayor to review the impact of the use of property sharing sites such as Airbnb on housing affordability and safety. The sharing economy is enabling businesses and individuals to profit on properties being used for long term on Airbnb and is preventing families, workers and young people from accessing affordable housing. We further recommend an assessment on the impact on London rents, and the education of tenants and landlords on the issue of sub-letting and the possible breaches of mortgage, insurance and licensing conditions.
... In London, the primary measure includes the 90-day annual limit for Airbnb hosts (Booth and Newling 2016). This measure was established alongside a public campaign against Airbnb, which one year later was revealed ineffective both in terms of avoiding gentrification and regulating the home-sharing practice (Simcock and Smith 2016), with a total of 2,444 Airbnb properties rented in 2016 for more than six months of the year (Institute for Policy Research 2016). Other types of sharing economy that is considered less lucrative (e.g., dog sharing) are subject to less regulation, mainly adhering to self-regulating measures to ensure the safety of the participants involved. ...
Chapter
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This chapter aims to examine the configuration of the sharing economy in the United Kingdom. The chapter provides an examination of the key opportunities and challenges that this socio-economic model generates in the country. It includes an account of different sharing economy initiatives in the United Kingdom, including crowdfunding projects, tool libraries, timesharing banks, men’s sheds, and shared workspaces, commercial sharing economy services, micro-libraries, community gardening projects, and paid online peer-to-peer accommodation. Increased consumer choice and economic benefits derived from an extended economy around the sharing economy are identified as key opportunities. Key challenges relate to policymaking and taxation of businesses and participants in the sharing economy, as well as the wider enforcement of health and safety regulations and the impact that the recent pandemic is having on the industry. The chapter also provides an examination of the latest developments and regulations in this area. In addition, the chapter identifies the most pressing issues and possible future directions of research in this context.
Article
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OPEN ACCESS: http://www.emeraldinsight.com/toc/jtf/2/1 Purpose Although networked hospitality businesses as Airbnb are a recent phenomenon, a rapid growth has made them a serious competitor for the hospitality industry with important consequences for tourism and for tourist destinations. The purpose of this paper is to analyse the nature of the phenomenon, its potential further development in the next five years and the impact this developments will have on tourism, on hotels and on city destinations. Design/methodology/approach A literature study, combined with scenario workshops and a Delphi panel, were used to map current trends and uncertainties. With this input, future scenarios were elaborated using the Global Business Network (“scenario cross”) method. Findings Network platforms as Airbnb are often classified under something called the “Sharing Economy”, a denomination that obscures their true nature. Airbnb is a challenging innovation to which traditional hospitality will have to respond. Its impact has at the same time led to a call for regulatory policies. The definition of these policies and the evolution of tourism are variables that determine future scenarios. Attempts to ban the phenomenon mean a disincentive to innovation and protect oligopolistic markets; more receptive policies may have the desired results if tourism grows moderately but in booming destinations they may lead to a harmful commercialization. Originality/value Until now, Airbnb has been described in conceptual studies about the so-called “Sharing economy”, or more recently in empirical studies about isolated effects of holiday rentals. This paper contextualizes the evolution of networked hospitality and seeks to synthesize the sum of its impacts, thus enabling businesses and local governments to define positions and strategies.
Article
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City tourism is one of the fastest growing travel segments worldwide [18] and the changing nature of city tourism becomes increasingly apparent in many cities. Facilitated by mobile access to information, tourists are increasingly seeking, finding and consuming ‘local experiences’ and the boundaries between tourists and residents become increasingly blurred. While the impact of the proliferation of information and communication technologies (ICTs) on the travel industry as well as on tourist behaviour and the travel experience has been widely acknowledged (Egger J Hosp Tour Technol 4(2): 119–133, 2013), (McCabe et al. Tour Manage Perspect 4: 36–44, 2012), (Stamboulis and Skayannis Tour Manage 24: 35–43, 2003), [35, 40], (Ye et al. Comput Hum Behav 27: 634–639, 2011), the implications of this new type of tourism for future urban development have received little attention (Füller and Michel Int J Urban Regional 38(4): 1304–1318, 2014). This paper aims to better understand the underlying causes of the changing nature of city tourism and how this change could impact the future development of cities. It is argued that in addition to the proliferation of ICTs, the phenomena of experiential travel and social acceleration have contributed to the rise in popularity of city tourism as well as to a change in tourist behaviour. Possible implications for the future development of cities resulting from this new type of tourism, as well as approaches to solving those challenges, are discussed. It becomes clear that an interdisciplinary approach will be required in order to fully understand the challenges posed by city tourism as well as to develop and implement strategies for a successful integration of tourism into future urban development.
Article
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The paper discusses four paradigms of economic value creation that completely transform how companies create and deliver value.
Article
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This article explores the emergence of Airbnb, a company whose website permits ordinary people to rent out their residences as tourist accommodation. The company was just recently established, but it has grown extremely rapidly and is now selling many millions of room nights annually. This rise is examined through the lens of disruptive innovation theory, which describes how products that lack in traditionally favoured attributes but offer alternative benefits can, over time, transform a market and capture mainstream consumers. The concepts of disruptive innovation are used to consider Airbnb's novel business model, which is built around modern internet technologies, and Airbnb's distinct appeal, which centres on cost-savings, household amenities, and the potential for more authentic local experiences. Despite Airbnb's growing popularity, many Airbnb rentals are actually illegal due to short-term rental regulations. These legality issues and their corresponding tax concerns are discussed, with an overview of the current state of regulatory flux and a possible path for resolution. Thereafter, the article considers Airbnb's potential to significantly disrupt the traditional accommodation sector, and the positive and negative impacts Airbnb may have on destinations. Finally, numerous questions for future research are proposed.
Airbnb to be legalised in London. The Guardian
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