Half a million rental properties may disappear from rental market as landlords shift to short-term lets – warning

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.”

 

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5 Comments

  1. Woodentop

    A Let is a Let regardless of length of term and short term landlords are liable for H&S, which they seem to think doesn’t apply to them and found an escape to regulation. Time they were rained in …. they have the wrong attitude to be responsible landlords!

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    1. Will2

      Being a responsible landlord is not about short-term or long term. Your intimation that changing from long term to short-term means they have a wrong attitude is incorrect.  Many will be fighting against to loss of control of their investments which is being caused by abolition of S21 which effectively is giving the state control over your hard earnt investments. Return would be higher but vacancies/voids greater and a great deal of hard work needed to run short term lets.  It is the so called housing charities supported by policial plonkers driving many excellent landlords away by having lobbied abolition of S21. Having seen what happens when the Rent Act 1977 was in use landlords have a right to be deeply concerned.  A bad landlord will always be a bad landlord and a good landlord will always be a good landlord irrespective of the term of a let. So sorry Woodentop I disagree with your comment however have a good day.

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      1. Woodentop

        You are welcome to disagree and I welcome your reply. Our experience on many short terms lets, is landlords haven’t a clue of their responsibilities or are under the impression that as they are not regulated, so don’t need to bother. Many have taken the short term option for the reasons you have cited, but there are many, many who are bad or lazy landlords think they can hide from responsibility. That is my point. They haven’t found the loop hole they thought that covers all aspects.

         

        Why should short term be any different? The risk for a tenant is just as great on the first, second, third, fourth ……. day, as the third, fourth …. month. That risk is a time bomb for landlords who think they have circumvented regulated landlords requirements particularly when it comes to H&S, they haven’t.

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        1. Will2

          Good to exchange views.  I do not condone H&S standards but s21 abolition will drive many good landlords into short term let’s rather than give security of tenure of their property to a tenant.  Best regards.

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          1. Woodentop

            Sec 21 certainly will. I’m concerned that it is likely to throw the dice for landlords to vacate the market now, rather than short term lets. Many are very worried and the majority in our industry are considered amateur landlords.

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