The most popular areas for Airbnb guests visiting London are right at the heart of the housing crisis, adding to concerns about the impact the site is having on London’s already stretched rental market.
Tower Hamlets and Hackney top of the list of popular places to stay — with properties listed on the site in these boroughs occupied 94% and 90% of the time respectively, according to a survey by My Property Host.
Visitors are attracted to east London for the same reasons that Londoners are: it’s more affordable than other parts of London. According to the survey, the average nightly rate for accommodation for four people in Tower Hamlets is £151 on Airbnb, compared with a London average of £172.
My Property Host managing director Elena Lopez says: "Tower Hamlets and Hackney consistently have the highest occupancy rates, with hosts there able to let their properties nearly every night they want to."
This suggests that there is little risk of properties in the area sitting empty for long, and with landlords able to charge ‘hotel prices’ for properties on a night-by-night basis there is little incentive to provide long-term stable accommodation for residents.
Many councils are worried that Airbnb's higher-cost short-term rentals is driving up rental costs, and takes properties out of the long-term rental market.
According to letting agents Foxtons, the average rental value for a two-bedroom property in Hackney is £475 per week and £568 in Tower Hamlets. However a two-bedroom property in Tower Hamlets rented out for seven nights to four guests (let’s assume either a family or two couples/four friends in two bedrooms) at an average of £151 per night via Airbnb could generate £1,057 for a landlord.
London’s housing crisis is well-documented. Young Londoners are so out-priced that some women have even been responding to ads offering free accommodation for sexual favours.
Tower Hamlets council told Londonist the borough is hit hard by the housing crisis due to high levels of ‘growth, poverty and deprivation in the borough’.
A spokesperson said: "With soaring prices, the fastest growing population in the country and around 20,000 people on our council housing waiting list, we are the front line of the housing crisis.”
Surely it’s time for some air support?
Hackney MP Diane Abbott told Londonist: "We urgently need controls to ensure unscrupulous landlords cannot use Airbnb as a way of bypassing regulations. London is already suffering a serious housing crisis and huge profits are being made as London’s rents increase in an already overheated market."
Other capital cities have already started to crack down. New York governor Andrew Cuomo recently signed a bill that penalises hosts up to $7,500 (£6,130) if the owner/tenant is not home during a guest’s stay, if it is shorter than 30 days and in a multi-unit building. Laws in Berlin ban anyone from using a home rental service to rent out an entire flat with fines of up to £70,000.
While London does have a rule that no home can be rented out on an Airbnb service for more than 90 days per year, it is almost impossible to enforce or keep track of.
Last month MP Ian Wright, who chairs the House of Commons Business Committee, wrote to mayor Sadiq Khan asking if a change in the law is needed. He accused landlords of being ‘hoteliers in all but name’ and suggested that some landlords are dodging regulations and taxes that hotels are required to pay. The committee’s office told Londonist it has not yet received a response from the mayor.
A spokesperson for the Mayor of London told Londonist: "The mayor supports the right of Londoners to be able to benefit from renting out their homes for short periods, but that needs to be balanced against the need to ensure that Londoners are not adversely affected.
"London boroughs are able to take action against landlords who do not adhere to current legislation on short term lets. We welcome dialogue between London boroughs and Airbnb about how existing legislation could better be enforced in the capital, and whether the legislation needs to be revisited."
Airbnb can be a great option for visitors looking for central and more affordable locations or for Londoners who want to make some extra money renting out their place while they are away. These people are using the digital sharing economy as it was intended. Landlords who have multiple properties are essentially undercutting hotels, starving the housing market of property and exploiting the service.
A spokesperson for Airbnb told Londonist: "We don't recognise this data and the typical Airbnb host in London shares their space for 50 nights a year. We are working with policymakers to promote responsible home sharing that makes communities stronger."