More than 130,000 homes have potentially been taken out of the long term private rented sector as more buy-to-let landlords list properties on short-term holiday home websites such as Airbnb instead, fresh research shows.
The biggest jump in the number of individuals advertising property on Airbnb has been recorded in London, where there has been a 75% rise in the volume of multi-listings on Airbnb between February 2016 and March 2017, according to new analysis by the Residential Landlords Association (RLA).
A UK wide survey by the RLA of almost 1,500 landlords also found that the number of whole properties and rooms advertised on Airbnb in London available for more than 90 nights a year increased by almost a quarter - 23% - between February 2016 and March 2017, despite planning permission being required in such circumstances and Airbnb launching a crackdown to better enforce this rule earlier this year.
Some 7% of those surveyed said that they had now started to offer properties as holiday/short term lets through Airbnb or a similar platform.
Given that many of these properties would have previously been let longer term in the private rented sector, it is estimated that if this trend was reflected across the whole sector, this would mean a minimum of 134,400 private rented homes moving from the traditional private rental market to holiday or short let accommodation.
Of those who have moved over to short-term letting, 36% reported this was because of the changes to mortgage interest relief.
One landlord who has made the move to holiday lets commented: “I didn't want to do this, but the tax changes have forced me down this route. Selling is not an option due to capital gain tax, and this iniquitous tax which is effectively retrospective is unjust in that my buy to lets are a business, just like any other. There will be less properties available to rent as a result of this tax.”
The RLA is calling on the government to end the perverse incentive landlords have to move to holiday lets by scrapping the mortgage interest relief changes.
RLA policy director, David Smith, commented: “With London and the country as a whole in desperate need of new homes to rent in the long term, it is crazy that recent tax changes encourage landlords to move to the short term holiday let market.
“What we need is a tax system that encourages investment in homes to rent for the long term by good landlords.
“By skewing the market government policy will serve only to hit the hardest those young people and families who most need a growing private rented sector to meet their needs.”