Since being founded in 2008, Airbnb has risen to become a leading global property platform for short-term lets – and a company currently valued at $25 billion.
The concept is a relatively simple one – those with spare rooms and space in their current lodging can rent this out on a short-term basis to individuals travelling for business or pleasure. This presents the host with extra revenue at no real extra cost or effort, and offers travellers a more unique and personal travelling experience.
People can connect with a wide range of accommodation options via computer or a mobile device, and the ease of use along with variety of hospitality options has resulted in Airbnb amassing a presence in over 191 countries throughout 34,000 cities.
As the popularity of the booking service has grown, many people are now purpose-buying second homes to use exclusively for short-term lets on Airbnb – so could you too benefit from renting out a second home in London?
Why do Airbnb in London?
Figures show that the average host doing Airbnb in the UK can earn over £2,800 by letting a property for 33 days of the year.
In London, a city that welcomed 17.4 million international visitors in 2015, there is the opportunity to take advantage of higher rates that can be charged for accommodation. Using the Airbnb host tool, you can see just how much you could expect to receive on a weekly basis for letting out a shared room, private room, or a full property. For the latter, you could charge a weekly average of £546 (July 2016), while in really desirable areas of London such as Mayfair, you can charge upwards of £601 per week.
Over 13,000 listings emerged in London upon Airbnb becoming legal in March 2015, and of these listings, more than 6,600 were for full properties. This figure has since doubled, meaning investors and homeowners alike are becoming attuned to the potential that Airbnb provides.
Some Final Thoughts
Airbnb has been legal in the UK for over a year, but it still makes sense to check the legalities surrounding letting out your property to avoid penalties.
For a long time in London it was a legal requirement for homeowners to obtain planning permission to let out a property for three months or less; although this is no longer the case, there can still be caveats for short-term lets depending on your building type and location, so check before listing your property that you are remaining compliant to avoid what can often be hefty fines.
Airbnb also levies fees for its services – there’s a service fee of 3 per cent to take into consideration, along with VAT. If you have existing space, you’ll need to think about things like cost and time associated with changing sheets and the extra cleaning that will accompany having regular guests, and if you are planning on purchasing property specifically for use as an Airbnb let, you will of course need to weigh things like the monthly income and occupancy rates against the cost of property.
A report from Pastor Real Estate contains projections for residential property prices in London to rise by 27 per cent by 2018, so to make the most of capital gains along with income generated by Airbnb, it makes sense to examine buying opportunities now.
London is one of the most popular Airbnb cities with over 32,712 hosts (July 2016), and it is one of the most profitable for hosts who select smart properties. Airdna reveals that, unlike in other cities, seasonal travel does not have as big an impact on occupancy rates in London, and that they are generally consistent. You can use the helpful Airdna tool to help you determine how much you could potentially earn per week in each area of London to assist with your calculations.