Accommodation sharing site Airbnb is allowing professional landlords to dodge tax and safety obligations, an MP has claimed.
The site, which originated in the USA and has spread globally, allows individuals to market accommodation peer to peer. While originally set up with the concept of allowing homeowners to let out a spare room on a short term basis, the site is now being used in many other unintended ways – with a range of consequences that are affecting hotels, and domestic rental properties.
Iain Wright, the chairman of the House of Commons Business Committee, has written to Sadiq Khan raising the question of whether new laws are needed, to combat some of the problems.
Following deregulation last year, Londoners are allowed to rent out their homes for up to 90 days a year, without seeking local authority planning permission. However, there are fears this rule is being broken, and it is in practice not enforceable. And, as a result, there are worries that in some areas the move to short term renting may be taking properties out of the mainstream residential market, further pushing up costs and demand for what remains.
In his letter, Wright said: “Landlords who use companies like Airbnb to illegally let properties for more than 90 days are driving up prices and leaving tenants vulnerable.
“These landlords are hoteliers in all but name and gain an unfair competitive advantage by dodging regulations and taxes which hotels are required to pay.
“Disruptive technologies make a valued contribution to the country’s economy and it is important to embrace such disruption and innovation as a means of improving prosperity and customer choice, but the rules must be enforced and a level playing field provided.
“Where those rules are unenforceable, then the law may have to change.
“London appears to have a particular problem with these issues and that is why I have asked the mayor for his views on what needs to be done to protect the public and ensure a level playing field in the property and hospitality sectors.”
Airbnb defended its operation, which is reckoned to generate £1.3bn in revenues across London in a year. The company says the typical host earns an additional £3,500 by renting out space for 50 nights a year: “The vast majority of Airbnb hosts are regular Londoners who share their homes to boost their income and afford living costs in one of the world’s most expensive cities – they are not typically businesses or professionals.
“London has clear and simple home-sharing rules; we regularly remind hosts to follow them and we are working closely with London boroughs to promote responsible home-sharing and help tackle bad actors.”
LPA Perspective: The whole issue of subletting raised its head in the run-up to the London Olympics, when Airbnb was just getting going. At the time, boroughs were split on whether they would enforce the existing rules: Westminster planned a draconian approach, while others declared they had insufficient resources to chase up those defying the rules.
The hotel sector hates Airbnb, accusing it of allowing what are effectively virtual hotels to be set up, free of the fire and safety regulations that regular hotel properties must adhere to. And there are worries that it is taking residential rental stock out of circulation.
And the problem is not unique to London. Other cities around the globe have had to work out what to do, as Airbnb emerges as a rental sales platform that is agnostic about existing rules and regulations. Berlin has added restrictions, concerned about the number of apartments being taken out of the general home rental market; Amsterdam, too, has agreed a set of policies with Airbnb, in a bid to bridle its growth.