Airbnb and Short Let Boom may be over says agency chief

A lettings agency director is suggesting the short lets boom may be over.

Marc von Grundherr, director of Benham and Reeves, says that while the overall number of Airbnb-style short lets across the country has risen, occupancy levels have significantly dropped.

He looked at 10 areas across Britain which have traditionally been regarded as hotspots for short lets. These are London, Manchester, Peak District, Lake District, the Cotswolds, Cornwall, Devon, Dorset, Somerset and Edinburgh. 

The figures show that there are over half a million active short-let listings. With 52,494 active listings, London is home to the largest number of short-term lets, with this number having increased by 22% over the last year. 

Just Manchester has seen a larger increase at 29%, with the Peak District (+18%), Lake District (+15%) and Cotswolds (+10%) also seeing a notable increase.

Somerset, Dorset, Devon and Cornwall have also seen an increase but Edinburgh - where there is a Scotland-wide landlord registration system in place for short lets - has seen a drop(-12%).

However, von Grundherr says that while many landlords have been tempted away from the private rental sector by the far higher rental incomes secured across the short let space, all 10 of the areas analysed have seen a reduction in occupancy rates over the last year.

The largest falls have been in Devon (-16%), Dorset (-14%) and the Cotswolds (-14%).

As a result, annual revenues for short let landlord hosts have also been lacklustre over the last year, with Devon (-7%), Cornwall (-4%), London (-4%) and Manchester (-3%) all seeing an annual drop, while annual revenue growth across Dorset (0%), the Cotswolds (1%) and Somerset (2%) have been largely flat.

There's also been a heft  price hike passed onto the consumer in order to help balance the books, with all 10 areas seeing a sharp increase in the average daily rate charged - the largest of which have been seen across Edinburgh (+18%), the Lake District (+16%), Somerset (13%), the Peak District (+13%) and Cornwall (+10%).

Von Grundherr says: “Many traditional landlords have succumbed to the allure of the short-term rental market in recent years, as they’ve looked to boost the profit margins of their rental portfolio following a string of legislative changes to the PRS sector.

“This is a trend that has continued over the last year with the vast majority of areas we analysed seeing an increase in active listings. However, the data also suggests that the heat may be dying down with respect to consumer demand, with occupancy rates falling significantly and denting annual revenues in the process.

“As a result, it seems as though short-let providers have ramped up daily rates in order to compensate, but this is a tactic that is unlikely to resonate with consumers given the current economic landscape.”