A leading supplier says the current market standstill is an opportunity for the industry to rethink how short lets can be regulated in line with the rest of the private rental sector.
No Letting Go, the UK's largest provider of inventory services, says that one immediate issue highlighted by the Coronavirus crisis is that the recent move by some residential landlords towards short lets on Airbnb and similar platforms has now been hit by travel lockdowns in the UK and many other countries.
A report from the UK Short Term Accommodation Association suggests that some 70 per cent of short-term rental bookings have been cancelled since the outbreak of coronavirus, rising to as high as 90 per cent for some companies.
This has prompted Nick Lyons, chief executive and founder of No Letting Go, to suggest there’s an opportunity in the current ‘market pause’ to reassess how regulation works for an increasingly diverse rental sector.
One of the biggest issues associated with the growth of the short-term lets market is a lack of regulation and enforcement, according to No Letting Go.
In London, homes are only permitted to be let on a short-term basis for 90 nights per year. However, it is thought that this rule is widely flouted, with Camden council reporting that 3,400 - or 48 per cent - of available short-let properties in the borough had exceeded the 90-night allowance.
There is also considered to be little or no regulation around property upkeep, tenant vetting or contracts when it comes to landlords letting properties on a short-term basis.
"As the short-term lets industry faces its first major hurdle due to the current global situation, now could be a good time for the sector to consider how it could be better regulated in the future when normal service resumes" Lyons suggests.
"The regulation that is in place - such as the 90-day per year rule - needs to be properly enforced, while there needs to be serious thought given to introducing laws similar to those that traditional landlords must comply with.”
He says the recent creation of a trade body for short lets, the UK Short Term Accommodation Association, is a positive step but more needs to be done to bring the sector in line with the rest of the market.
Lyons warns that a lack of regulation and formal tenancy procedures means properties being let on a short-term basis are at an increased risk of damage. Short-term lets properties also have a reputation for being used as party venues - another scenario in which the chances of damage or theft are significantly higher.
"Our advice for landlords looking to move into the short-lets market is to be careful. Yes, the returns can be impressive but without putting in place necessary measures, you could be putting your long-term investment at risk.
"Meanwhile, for agents looking to manage more short-lets and take advantage of a booming market, it's vital their management packages offer some protection to landlords.
"This could include a professionally compiled inventory, thorough vetting process, taking deposits and providing access to comprehensive insurance or rent guarantee policies" he says.
And he concludes: "We expect the short-term lets market to continue to grow once the Coronavirus pandemic abates. However, landlords’ properties could be at risk if there is no commitment to further regulation in the sector, so it would be good to see a concerted effort to see more protective measures introduced.”