Housing Research

The impact of short-term lets

Analysing the scale of Great Britain’s short-term lets sector and the wider implications for the private rented sector.

Nearly half a million properties could be left unavailable for residents looking to rent in the private rented sector, as more landlords exit the market and move into short-term lets due to the raft of legislative changes they have been faced with.

Key findings

• Short-term letting via online platforms has grown quickly over the past decade, with around 225,000 active listings on one site alone in 2017/18
• Sixteen per cent of adults in Great Britain have let out all or part of their property on a short-term basis over the past two years; most commonly they have let out their main residence but over three per cent of people have let out a property they own but don’t usually live in
• The scale of short-term letting activity varies widely between locations; the number of listings in the London Borough of Westminster was equivalent to 6.7 per cent of its total dwelling stock compared to 0.2 per cent in the London Borough of Havering
• Landlords have come under increasing pressure from government regulations in recent years through the removal of tax relief, additional stamp duty and a ban on tenant fees
• Almost one-quarter of landlords surveyed currently let out properties on short-term lets, while twelve per cent of these have done this by changing the use of a property that was previously used for long-term lets; almost 50,000 properties have already been made unavailable to long-term tenants in order for landlords to pursue short-term lets
• Increased flexibility and burdensome regulations in the long-term let sector were the main reasons for landlords to switch to short-term
  lets
• Ten per cent of landlords surveyed said they were ‘very likely’ or ‘fairly likely’ to offer short-term lets in the future in properties that are currently used for long-term tenancies
• If only the landlords that said they were ‘very likely’ to move to offering short-term lets were to do so, between 80 and 230 thousand properties could be unavailable for residents looking to rent, which is equivalent to between 1.5 and 4.3 per cent of the private rented sector dwelling stock in Great Britain
• If the landlords that said they were ‘very likely’ or ‘fairly likely’ to move to offering short-term lets were to do so, between 200 and 470 thousand properties could be unavailable for residents looking to rent, which is equivalent to between 3.8 and 8.7 per cent of the private rented sector dwelling stock in Great Britain

Our recommendations to limit the impact of short-term lets on the private rented sector:

• Carefully consider the impact of any future regulation that may incentivise landlords to start using their properties for short-term lets and thereby reduce housing supply for local people trying to find a home
• Ensure a level regulatory playing field between short-term and long-term lets including protections for tenants and health and safety requirements
• Ensure a level taxation playing field between short-term and long-term lets so there are no advantages for commercial landlords using their properties for short-term lets
• Identify ways to improve enforcement of cases in which commercial landlords are not complying with local planning laws or the 90-day limit for short-term lets in London
• Recognise that the impact of short-term lets on housing supply is not uniform across the country and ‘one size fits all’ regulations are unlikely to be optimal
• Distinguish between using one’s primary residence for short term lets when the property is being under-utilised and commercial landlords renting out entire properties on a full-time basis
• Monitor and track the number of entire properties on sharing platforms by hosts with multiple listings in different areas to inform future policy
• Consider introducing limits on short term letting activities in areas in which there is a demonstrable impact on private rented housing supply

Download the report

Further Research