Airbnb trying to tempt landlords seeking higher yields – claim
A leading property industry figure says Airbnb is attempting to persuade traditional buy to let landlords into going down the short-let route to get potential high income.
Property management veteran David Alexander, co-founder of Apropos by DJ Alexander, says Airbnb appears to be targeting traditional landlords “by highlighting potentially substantial earnings for owners who join their site.”
He says that although official data states that average earnings for Airbnb hosts are just £3,100 per year – unlikely to attract many landlords, he says – Airbnb also provides “potential revenues specifically for different cities which are much more appealing.”
Alexander cites London; he says Airbnb says hosts could earn £3,011 a month. In Edinburgh it’s £1,451, in Manchester £1,518, in Bristol £1,454, in Leeds £1,519, in Newcastle £1,372 and in Birmingham £1,099.
“These numbers will appear very attractive to landlords who have falling rents in real terms, lower tax incentives, and increased management and maintenance costs” he suggests.
Alexander says Airbnb has 223,200 active listings in the UK generating £854m with average earnings for the owners of £3,100 per year. The growth in some parts of the UK has been substantial with Edinburgh, for example, now having over 12,000 hosts which has doubled in the last three years.
In Scotland Airbnb has 31,000 active listings earning £129m and average annual earnings of £3,800 which are the highest of any part of the UK.
Although Airbnb listings are across the UK there are four key areas where the majority are located – London, Scotland, the South West and the South East which collectively account for 73 per cent or 163,300 of all listings.
“This financial squeeze, coupled with government cuts to tax reliefs, has meant that many landlords have viewed Airbnb as an attractive option. But the proposed changes in Scotland and Bristol to the way in which the holiday lettings market is regulated could produce more problems than traditional long term letting” says Alexander, referring to possible clampdowns being introduced by Bristol city council and the Scottish Government respectively.
“There are, of course, pluses in short term letting on Airbnb and other websites. The daily income is higher than long term letting; to date, there have been fewer legislative, financial and regulatory issues; and it can be less punitive, in some circumstances, for borrowing. But the announcement that Scotland and Bristol are going to attempt to control the growth of holiday lettings is a clear warning sign for anyone considering shifting into this market” he concludes.