Lenders dismiss Airbnb's impact on housing supply

The actual proportion of London homes available on short-term lets is less than 1%, according to one development finance lender.

The comments come following fears that property investors are buying up London homes and placing them on short-term letting sites such as Airbnb, preventing them from being used as long-term living spaces.

Earlier this month, Sadiq Khan, mayor of London, said he would be investigating the impact of Airbnb on the capital and would decide whether legislation was needed.

“The negative amenity impacts created by a large transient population can be significant if left unchecked,” said Mr Khan.

“There is also a concern that permanent housing supply is being ‘lost’ through short-term bookings, with entire homes rented out through short-term letting websites for cumulative periods that may be longer than the 90 nights per year permitted in London by the new law.

“For these reasons I understand the concerns that some people have about short-term lettings in London.”

Mr Khan was speaking after the Residential Landlords Association (RLA) revealed that the number of Airbnb properties in London increased to 42,646 between February and June this year, a 27% increase on the 33,715 properties previously recorded.

Metro Bank allows mortgage customer to rent homes on Airbnb 

However, despite Mr Khan’s comments, Metro Bank revealed that it would be enabling mortgage customers to rent their properties through Airbnb and similar sites for up to 90 days without prior approval.

Paul Riseborough, chief commercial officer at Metro Bank, said it was its focus to make its customers' lives as straightforward as possible and hoped the news would give users the reassurance they needed to jump in and take advantage of everything the economy had to offer.

James McClure, general manager at UK & Ireland Airbnb, hoped this would encourage further support from the mortgage industry after peer-to-peer lender Zopa partnered with the firm earlier this year.

‘Short-term lets is less than 1%’ 

“Although companies such as Airbnb receive wide publicity, the actual proportion [of] homes in London on short-term lets is less than 1%,” said Gareth Taylor, loan origination director at Zorin Finance.

“As this represents such a small proportion of housing supply in London, we do not believe that it has a material impact on supply or prices.”

Ashley Ilsen, head of lending at Regentsmead, found it surprising that investors would buy speculatively with a view to using their property for short-term lets and added that the short-term letting market was extremely complex and varied noticeably depending on location.

“I find that investors active in this market have an affinity more towards HMOs rather than focusing on Airbnb.

“If it gets to the point where this starts to stop the flow of housing supply, then more would need to be done to rectify this.”

Gareth added that generally potential purchasers had to compete in the open market for properties, irrelevant of their intended use of the property.

“There is no direct evidence that individuals would pay an inflated price for a property because of the high yields generated from short-term lets. 

“In fact, purchasers would be looking to get the best price possible to bolster their yield and provide downside protection against long voids.

“The social impact of short-term lets on neighbouring residents and the local community is more pertinent. 

“If more legislation were to be introduced, then it should be to protect the peaceful enjoyment of people’s homes.”

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