A shift among landlords to short-term lets could see almost half a million properties become unavailable for tenants, ARLA Propertymark has warned.
The trade body is calling for a level regulatory playing field with long-term lettings including protection for tenants, health and safety requirements and limits on short-term lets where there is an impact on private rented housing supply.
It comes as analysis by Capital Economics for the trade body found that the raft of legislative changes hitting landlords was pushing many to short-term lets where regulations are less punitive.
Short-term lettings benefit from an annual £7,500 rent a room relief, there are no regulations surrounding deposit protection and less stringent rules on health and safety in contrast to private rental sector rules.
The research – based on a survey conducted in October 2019 – found that 3% of landlords of landlords were “very likely” and 7% were “fairly likely” to shift to short-term lets, especially among those with five or more properties.
Capital Economics says this equates to a potential 200,000 to 470,000 rental homes being repurposed.
Highlighting the growth in the short-term lets sector, the number of active listings on Airbnb in the UK rose by a third to 223,000 in 2018, according to the report.
The survey found that 16% of landlords said they only offered short-term tenancies and a further 7% offered both short-term and long-term tenancies.
Of the overall landlord population, 2.7% have changed from long-term tenants to short-term lets, Capital Economics said.
If this share is applied to landlords across the country, this equates to 46,000 properties that have already been made unavailable for local people looking for a home, the report said.
Almost half of landlords that offer short-term lets said they do so to enjoy more flexibility in how they use their property.
Others cited regulatory and tax changes in the private rented sector over recent years and the burdensome regulations in the long-term letting market.
David Cox, chief executive of ARLA Propertymark, said: “The growth in short-term lets is particularly concerning for the traditional private rented sector.
“As landlords are continuously faced with increased levels of legislation, it’s no surprise they are considering short-term lets as a chance to escape this.
“Unless the sector is made more attractive, landlords will continue to exit the market, resulting in less available properties and increased rent costs.”
Commenting on the research, David Smith, policy director for the Residential Landlords Association, said: “This report highlights how inconsistent the Government’s approach to the rental market now is.
“On the one hand the Ministry of Housing wants to encourage more landlords to offer properties to tenants on a long-term basis. On the other hand the Treasury has a tax system which makes renting out holiday homes more appealing at a time when demand for homes to rent is outstripping supply.
“What we need is a tax system that supports and encourages the majority of hard working landlords doing a good job to provide the long-term, quality rental accommodation tenants desperately need. We call on the Chancellor to do this in his forthcoming Budget.”