Phil Spencer asks: Should Agents Manage Short Let Properties?

It’s not easy for anyone - even professionals like lettings and estate agents - to keep up with the blizzard of new rules and regulations surrounding the property business these days.

However, there’s a case for looking at some of these changes as opportunities rather than challenges. 

For example, take the government’s proposals to regulate Airbnbs and properties let out through other online platforms like Vrbo. 

As the rules around these short lets become more complicated, isn’t there an argument for some lettings agents in particular to diversify into this niche as well as mainstream rentals?

Government proposals for short lets 

Let’s look at what the government proposes.

Firstly, planning permission will be required in the future if a whole property is given over permanently to short-term lets. Secondly, owners will be able to let out their own home (whether it’s their only property or their main one) for a maximum of 90 nights a year. 

Thirdly there will be a mandatory national register which short let ‘hosts’ will have to join, probably giving details of their property, insurance and amenities; and fourthly, in different areas the local authorities can operate additional measures if considered necessary.

The details of how to implement these reforms are still being considered by government, so we’re some months off these becoming law. 

And it’s clear the government doesn’t want to change the existing Rent A Room process where people can use a part of their own furnished home for lodgers or occasional tenants and get up to £7,500 a year tax-free. 

But there are literally hundreds of thousands of people who now short-let part of their own home, or their holiday home, or their former buy to let property on an ongoing basis.

They operate outside the Rent A Room scheme because they let out an annex or an apartment or a whole house, and they typically get well above the annual £7,500 HMRC threshold.

These are amateur landlords, if you like. And these people may now welcome the helping hand of a letting agent to manage their Airbnb to ensure it doesn’t fall foul of new laws when they come into effect.

The big agencies and corporate renters

In the very largest cities - London, Manchester, Edinburgh and a few others - specialist short let management firms have already sprung up, although their marketing targets large scale professional landlords. 

These services arrange for property cleaning, new linen, and even the stocking of the fridge for new tenants every few days.

And in these high-value locations, some lettings agencies have followed suit: for example, John D Wood, Knight Frank and Hamptons have short lets departments operating mostly in a few big cities and catering for corporate short term tenants. 

But smaller independent agencies, especially those outside of the large conurbations, could do their own more modest version of this, winning the business of individuals letting a house or apartment. 

Lessons from the buy to let sector

It’s no coincidence that as the mainstream buy to let sector has become more regulated and complex (there are now 150 laws applying to letting a property)  so more landlords have instructed lettings agents. 

It’s therefore likely that as short lets ‘catch up’ and become increasingly regulated for issues like health and safety, licensing and monitoring anti-social behaviour, so the professional guiding hand of an agent may be in demand. 

It’s unlikely that a ‘casual’ Airbnb host will need assistance seeking planning consent, or will not be confident that their property meets licensing or health and safety requirements. 

That’s exactly where the professional agent can be a life-saver, bringing expertise and systems to the table.

At the moment, lettings agents may feel they have more than enough business to be going on with, but that may not last forever. A fledgling business managing short lets for local hosts might be just the ticket in the future - a reliable ‘banker’ revenue stream, which also helps spread an agent’s name and reputation to the local community.

What’s not to like about that?

* Phil Spencer is a presenter, author, businessman and property investor. Phil’s consumer advice platform Move iQ, is a website, YouTube channel and podcast. Each preserve and reflect the same impartiality that consumers trust and base their property moving plans. Move iQ Pro, is Phil’s resource to support agents and has recently launched a video marketing product. Contact amanda@moveiQ.co.uk to find out more.