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Britain heading towards a rental crisis as BTL landlords switch to short-term lets

There has been a significant increase in the number of buy-to-let landlords who are considering converting their property to a short-term holiday let, new research shows. 

Nationally, ARLA Propertymark estimates that as many as 500,000 private rented homes could soon switch from the traditional private rental market to holiday or short-let accommodation, owed primarily to tax and legislative changes in the PRS. 

There has been major growth in the short-term lets sector, with a new report from ARLA Propertymark, in partnership with leading research consultancy Capital Economics, revealing that the number of active listings on Airbnb in the UK rose by 33% to 223,000 in 2018 from 168,000 in 2017. 


Unsurprisingly, London has the largest market in the UK, with the number of active listings rising four-fold from 18,000 in 2015 to 77,000 in 2019. 

Edinburgh has seen growth in short-term lets triple, with 32,000 active listings in the Scottish capital in 2019, up from 11,000 in 2016.

The study, which looks at the scale of Great Britain’s short-term lets sector and the wider implications on the PRS, also shows that 16% of adults have let out all, or part, of their property at least once in the last two years – equating to 8.2 million people.

This suggests 4.5 million properties, the equivalent of 19% of the UK’s housing stock, have been used for short-term lets, which works out at 24.2 million properties. 

A key concern with the increase in short-term lets is the impact it’s having on the private rented sector and the tenants who will suffer due to a fall in the number of properties available for long-term rent.

Based on the number of landlords considering a move to short-term lets, up to 230,000 properties could be left unavailable for tenants if landlords who said they were ‘very likely’ to move to offering short-term lets were to do so. 

If the data included landlords who stated they were ‘fairly likely’ to make the move, the number of properties rises to 470,000, which is a huge concern, particularly for vulnerable or low-income tenants, who are reliant on the private rented sector.

David Cox, ARLA Propertymark chief executive, commented: “The growth in short-term lets is particularly concerning for the traditional private rented sector. As landlords are continuously faced with increased levels of legislation, it’s no surprise they are considering short-term lets as a chance to escape this. 

“Unless the sector is made more attractive, landlords will continue to exit the market resulting in less available properties and increased rent costs.”

ARLA Propertymark has made the following recommendations to limit the impact of short-term lets on the private rented sector:

  • Carefully consider the impact of any future regulation that may incentivise landlords to start using their properties for short-term lets and thereby reduce housing supply for local people trying to find a home

  • Ensure a level regulatory playing field between short-term and long-term lets including protections for tenants and health and safety requirements

  • Ensure a level taxation playing field between short-term and long-term lets so there are no advantages for commercial landlords using their properties for short-term lets

  • Identify ways to improve enforcement of cases in which commercial landlords are not complying with local planning laws or the 90-day limit for short-term lets in London

  • Recognise that the impact of short-term lets on housing supply is not uniform across the country and ‘one size fits all’ regulations are unlikely to be optimal

  • Distinguish between using one’s primary residence for short term lets when the property is being under-utilised and commercial landlords renting out entire properties on a full-time basis

  • Monitor and track the number of entire properties on sharing platforms by hosts with multiple listings in different areas to inform future policy

  • Consider introducing limits on short term letting activities in areas in which there is a demonstrable impact on private rented housing supply.

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    This is destroying residential areas in Edinburgh in a way that student rentals never did. Abolish the £7500 tax free rents and council tax exemption from short term rentals and give the incentives to landlords providing long term homes instead.


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