The inevitable rise of short-term lets
On Tuesday 4 June, ECF Account Executive Rory O'Loughlin attended a roundtable discussion held by UKAA and presented by Lavanda about the short-term rental market. The event, held at the Walkie Talkie, covered topics such as the previously untapped potential of short-term rentals, and the positive future ahead as the traditional industries of real estate, hospitality, and the sharing economy continue to converge.
The discussion got me thinking about long-held attitudes toward short-term rentals, and how things are beginning to change.
For a long time, the short-term let market has had a poor reputation. Many horror stories in the news cycle over recent years have been commonly associated with negative experiences from short-term renters such as nightmare landlords and dodgy cash-in-hand dealings. The narrative that has evolved suggests that those who are looking to rent in the short-term are likely to be "exploited" in some way, shape, or form.
The lessons we learnt from historical instances of the prohibition of goods and services was that simply regulating against something you disapprove of doesn’t make it disappear. Instead, you inadvertently begin to fuel an unregulated and underground market. The short-term let market in the UK has been suffering in this way for several years.
If the industry was more appropriately professionalised, as it is now beginning to be, there is no reason that short-term letting can’t offer a positive option for renters to the benefit of both businesses and consumers.
New data released by Airbnb in October 2018 showed that as many as 300,000 private companies are now directly engaged with Airbnb to help manage their business travel arrangements. This has led to the creation of companies like Zeus in the United States that operate specifically within the business travel sector, finding attractive co-working and business appropriate locations.
We also know that 60% of all Airbnb guests are "millennials", closely mirroring the UK demographics of those renting privately in the UK. As such, we have begun to see rise of co-living companies such as Welive and The Collective who have adopted the model of developing co-living and working spaces in their Build-to-Rent developments. These developments are specifically tailored to millennials and other young professionals looking to rent for a short-term stay.
As the converging of work, living, travel and pleasure continue, the increased use of short-term lets is the inevitable. The professionalisation of short-term renting results in more rooms filled, a higher income for the landlord, as well as greater flexibility and choice for those looking for a short-term let, resulting in a win for everybody.
It is welcoming to see the previously untapped market of short-term lets begin to be realised. As the quality of the professional service improves, so too will the attitudes in Westminster.