One of the country’s largest independent property management firms says it’s seeing a clear shift within the rental sector from traditional long-term lettings to short lets via Airbnb and similar platforms.
DJ Alexander Ltd, which manages over 5,000 properties, says the shift has been prompted by the raft of new taxes and regulations on individual landlords.
David Alexander, the firm’s managing director, says Airbnb has made short lets a viable alternative to traditional buy to let rentals, with the bonus of higher daily income.
“But you need to realise that your lender must be told if you are making this change; your insurers needs to be informed; there may be considerable dead periods when you aren’t earning; the maintenance costs will be higher as you have beds to change and properties to clean; and Airbnb, although in the ascendant at the moment, is coming under considerable pressure from numerous local authorities around the UK and abroad” he cautions.
Alexander’s comments come after research by the Residential Landlords Association which shows seven per cent of landlords moving from long term to short term lets, and data from Airbnb suggesting the platform now boasts 168,000 listings across the UK.
“You may find that you make more money from [short lets] April to September but that the winter is completely dead in which case your earnings may balance out. The problem is that there is more work involved in dealing with 50 guests a year than in two permanent clients staying for a year. It is a balance and will depend on your expectations, your current experience of where your property income is going, and your location” Alexander warns.
“The issue for any wavering landlord contemplating the move from long to short term letting is the level of return, the guarantee of occupancy, the limiting of regulatory and financial restrictions, and the impact on the long-term value of the property investment. I would urge landlords thinking of this step to think long and hard before making a leap into the unknown. It will work for some but could be a mistake for others.”