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Soaring house prices, decreasing rental stock, and the loss of communities – the fallout from Airbnb-style lets

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In its UK Housing Review 2019, the Chartered Institute of Housing (CIH) says that the Airbnb industry needs to be regulated, as the rapid growth of Airbnb-style short lets could lead to the loss of private rented homes and displacement of long-term residents from their communities. 

The creation of ‘globalhoods’

There is a marked concentration of short-term lets in particular locations across the country which the CIH have named ‘globalhoods’.

Globalhoods are ultra-desirable neighbourhoods drawing in visitors from across the globe at an ever-increasing rate. For example, figures cited in the review show that: 

  • Airbnb has over 77,000 lets in Greater London - 55.4% of which are entire homes; 
  • in this area, the boroughs of Westminster, Tower Hamlets, and Hackney have the heaviest concentration of Airbnb-style lets; 
  • in Edinburgh there are 10,000 short-term lets, with its city centre ward alone having two Airbnb lets for every 13 homes;
  • the Isle of Skye in rural Scotland has one Airbnb letting for every 10 houses.

What is the possible fallout from Airbnb globalhoods? 

The CIH is concerned that this growth in short-term lets in particular areas could cause: 

  • a loss of much-needed housing from the private rented sector to the short-term lets market; and, 
  • displacement of long-term residents. 

Other issues that have been highlighted include:

  • non-compliance by hosts with existing safety and planning regulations and failure to get adequate Airbnb insurance;
  • entire neighbourhoods and communities being ‘lost’; and 
  • local housing markets being hit by rising rents and increased property values, especially in tight-knit communities.

What is the solution?

CIH says the industry needs to be regulated. Practical suggestions for tackling these issues include a tourism tax, improved council data on short lets, and planning caps on the number of short lets in one location.

CIH’s chief executive Terrie Alafat CBE says: “Digital platforms like Airbnb have brought great convenience to tourists who come to enjoy our cities and communities, as well as economic benefit to their hosts and local areas. 

“However, if left unregulated, there is a real risk of loss of much-needed housing from the private rented sector to the short-term lets market, and displacement of long-term residents. 

“We need to find a way to accommodate the housing needs of individual residents while allowing tourism to continue in our most popular locations. More regulation could be necessary if growth continues and local authorities still have no way to accurately monitor numbers.”