Currently valued at $25 billion, Airbnb has risen to the height of leading global property platform since being founded in 2008.
Airbnb works by allowing those with spare rooms and properties to rent these spaces out on a short-term basis. This is great for travellers, business trips and short breaks away. The host can gain an additional revenue, without any huge costs or efforts and travellers in need of a place to stay can choose a more unique travelling experience. This alternative provides the exploration of new places, meeting of new people and of course a variety in budget options. Everything is available online with global accommodation options available via a computer or mobile. Airbnb services currently span 191 countries around the globe, with 34,000 cities offering their available space to rent. The ease of use, combine with a wide range of hospitality options has seen Airbnb popularity soar.
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. London especially has seen a rise in second home purchases for Airbnb purposes.
Why do Airbnb in London?
By letting a property for 33 days of the year, figures show that the average host doing Airbnb in the UK can earn over £2,800.
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. You can see how much you can expect to receive on a weekly basis for letting out a shared room, private room or a full property by using the Airbnb host tool. For renting a full property, 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.
Upon Airbnb becoming legal in March 2015, over 13,000 listings emerged in London and 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.
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 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.