Renting out a property as a short-term let or holiday home has proved extremely profitable for some property investors, and a combination of changes to buy-to-let tax and the rise of Airbnb and rivals has made it increasingly popular.
This had led to concerns about properties being taken out of the long-term rental market, with a knock-on effect for renters and neighbourhoods.
But the COVID-19 outbreak means that significantly more landlords and homeowners are switching from short-term rentals to longer rentals, as demand for short-term accommodation plummets.
A new poll conducted by the UK Short Term Accommodation Association’s (STAA) with its corporate membership has highlighted the severity of impact that the COVID-19 coronavirus has had on companies’ reservations and income.
The feedback the STAA received from its corporate members, that represent the majority of the short-term let industry, showed that since 13 March, when the first effects in the UK were felt, most companies have seen more than 70% of their reservations cancelled, with some losing over 90%.
The vast majority of short-let providers have lost more than 70% of their income, according to the research.
Merilee Karr, chair of the STAA and CEO of UnderTheDoormat, said: “These findings are certainly not surprising but show that the short-term rental sector, that makes a massive contribution to the UK economy each year, is under severe threat. Bearing in mind that most of our members and their customers rely on tourism for between 70-100% of their revenue, the impact of the COVID-19 virus is potentially catastrophic.
“And, for those short-letting their home, the loss of both present and future income could be devastating. Thousands of people use the sharing economy to help pay their mortgage; for some, it is their primary source of income. Countless small entrepreneurs face going out of business, removing money from local economies both now, and in the future, when they will not be around to service demand once the virus has abated.
“On a more positive note, many homeowners, property management and hospitality companies have been making the best use of their assets by opening up properties for key workers. Schemes like NHS Homes, where properties are being offered to NHS staff as free accommodation show just how the short-term rental industry is pulling together to do their bit during this crisis.”