According to lettings payment automation provider, PayProp, regulating the fledgling market would reduce the number of negative experiences and allow more people to benefit from the availability of short-term rentals.
Despite offering exciting opportunities for letting agencies and landlords, the fast-growing short-term lettings market could benefit from regulation and the professionalisation of short lets, akin to that seen in traditional lettings, is needed to provide the necessary protection for all stakeholders.
Huge growth over a short period
The short-term lets market has grown rapidly in recent years – tenants enjoy the flexibility it offers, while landlords are attracted to the high yields it can provide. This boom has created many new management opportunities for letting agencies.
According to the Chartered Institute of Housing, there were over 77,000 short lets listed on Airbnb in London alone in April 2019, and over 10,000 in Edinburgh.
Neil Cobbold, Chief Operating Officer of PayProp UK, says: "The fast growth of this market shows there is a clear appetite for this type of accommodation, but short lets could benefit from regulation in order for the sector to be sustainable. There is currently no mandatory regulation of short lets, which is concerning when you consider that landlords now have to comply with 156 regulations to let a property long-term – a rise of 32% in just nine years, according to the Residential Landlords Association"
Horror stories show need for market regulation
There have been several high-profile cases where regulation of the short-term lets market could have protected landlords, tenants and agents from rogue operators.
For example, the extent of illegal sub-letting via short-term lets websites was recently exposed on BBC One’s Inside Out programme.
The documentary told the story of a London agency, base property specialists, which discovered tenants checking a family into an apartment it was managing for a client. Further investigation revealed that the flat had over 70 reviews on Airbnb.
Meanwhile, The Apprentice star Lord Sugar recently claimed that scammers had used images of one of his London properties to create a bogus Airbnb listing, costing a group of American tourists $600.
Cobbold suggests: "The number of stories of short-term lets being mismanaged or used to scam people appears to be growing. The unregulated nature of the sector is likely to be a contributing factor to this as fraudsters see a fast-growing market where there are opportunities to make large sums of money quickly and very few rules to comply with."
First steps taken, but further action needed
In response to some of the negative press around the short-term lets market, a new industry-specific trade body was recently launched.
The Professional Host Alliance proclaims that its mission is to 'accelerate the professionalisation of a sustainable, global short-term rental sector and build trust in the home-sharing economy'.
Cobbold concludes: "The launch of a trade body for short-lets firms is welcome and hopefully it can build momentum by signing up some of the industry's biggest names. Introducing more rules for short-term let landlords and agents to follow, as well as minimum standards for hosts to meet, could represent the next steps of progress.
Managing short-lets undoubtedly provides letting agencies with a huge opportunity, but there need to be more parallels with traditional private rentals for this new revenue stream to be ultimately safe and successful."