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Rent a Room or short-term let?

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The government’s Rent a Room scheme was intended to boost the availability of affordable housing by freeing up the many spare rooms and empty bedrooms in owner-occupied homes throughout the UK.

That intention seems to have backfired, according to a story by Property Reporter on the 7th of August.

Instead of offering a route to long-term residential accommodation for lodgers, the Rent a Room Scheme appears to have been hijacked by householders offering short-term lets through accommodation sharing sites such as Airbnb and others. 

The scheme was introduced in recognition of an estimated 19 million empty bedrooms in homes throughout England alone – and if even just 3% of these were let on a residential basis, extra housing capacity the size of Liverpool could be released.

As an incentive for homeowners to unlock some of this potential and much-needed extra accommodation, the Rent a Room scheme offers the opportunity to earn a tax-free income of up to £7,500 a year from the rent collected.

Since hosts of short-term lets such as those found on Airbnb and other websites – and even owners of bed and breakfast premises and guesthouses – catering mainly for tourists, also qualify for the benefits conferred by the Rent a Room scheme, there remains ample scope for the scheme to be abused in this way.

In London, for example, the availability of already scarce residential accommodation has suffered from a fourfold increase in Airbnb listings in the past 4 years and across the country as a whole, Airbnb has seen a 200% rise in popularity in at least 10 UK cities.