Airbnb has become one of the most disruptive, and controversial, online sites in the property world. The site, which allows anybody to list their property online to rent on a short-term basis, has become a favourite for holidaymakers and owners of homes in tourist hotspots. However, that rise in popularity has prompted the tourist accommodation sector in a number of cities respond by clamping down on the hitherto unregulated practice, introducing taxes, registers for people wanting to rent out their home, and banning properties that do not meet certain criteria.
But just how profitable is Airbnb? New research from Nested compares returns around the world for traditional buy-to-let investment and Airbnb listings. To conduct the research, Nested looked at all closed property sales in the past six months and current market listings for all locations researched.
It found that Cairo, Egypt has the most affordable average cost of a 3-bed property at £47,475, as well as the most affordable rent for a 3 bedroom property at a monthly average of £305.
Hong Kong, on the other hand, has the most expensive average cost of a 3-bed property at £1,893,535, while San Francisco has the most expensive rents for a home of the same size at a monthly average of £4,281.
Kuala Lumpur, Malaysia has the most affordable monthly average Airbnb cost at £1,310, while Dubai, UAE has the most expensive monthly average Airbnb cost at £12,513.
Using traditional rental markets, properties in Lagos, Nigeria, take the least amount of time to recuperate their value – 132 months on average. Properties in Taipei, Taiwan take the most amount of time to recuperate their value – 693 months on average.
Properties in Durban, South Africa take the least amount of time to recuperate their value via Airbnb rental -18 months on average. Properties in Beijing, China take the most amount of time to recuperate their value via Airbnb rental – 714 months on average.
In the UK, London has the most expensive three-bed properties, at an average of £907,038. It is also the most expensive city in the UK to rent 3-bed properties, costing £2,471 monthly on average, and has the most expensive monthly Airbnb cost for a 3-bed property – £5,159 on average.
It is no surprise, then, that properties in London take the most amount of time to recuperate their value via traditional rental, at 367 months on average. They also take the most amount of time to recuperate their value via Airbnb, at 176 months on average.
Properties in Sheffield, meanwhile, take the least amount of time to recuperate their value via Airbnb, at 36 months on average, and also takes the least amount of time to recuperate their value via traditional rental – at 169 months on average.
Read on for more on London’s new regulations on Airbnb listings – or click here for a rundown of global cities that have introduced new rules for Airbnb rentals.
Property industry welcomes Airbnb’s 90-day limit on London lettings
21st December 2016
The property industry has welcomed the announcement from Airbnb that it will enforce a 90-day limit on lettings in London.
Research by the IPPR earlier this year emphasised that London’s housing crisis is the result of not building enough homes, which has led to families being priced out of the market.
“At the same time, tourism in the capital is booming, with a record 31.5 million visitors in 2015 alone (ONS 2015a). This has helped to drive up the use of homesharing platforms, which provide accommodation within Londoners’ own homes,” said the report. “However, the rise of homesharing also presents a concern: if landlords are removing homes from the private rented sector in order to offer them for short-term let, and are doing so in sufficient numbers, homesharing could be exacerbating London’s housing shortage.”
The report concluded that Airbnb’s impact on London is negligible, but noted that there are “some areas in which pre emptive action would be desirable in order to ensure that the phenomenon does not contribute to the housing crisis in the future”.
“In some high-pressure markets such as Camden and Islington there is potential for homesharing to worsen the situation,” added the report.
As a result, Airbnb said that it will reinforce the regulation on its existing policy that prevents casual lets from exceeding a limit of 90 days. The policy also requires change-of-use planning permission for properties let for over that amount. Indeed, despite the existing rules, a quarter of homes in London on Airbnb were rented for more than 90 days, breaching the law and an act designed to stop landlords turning homes into pseudo-hotels.
The Association of Independent Inventory Clerks (AIIC) has welcomed the news. The inventory association has previously criticised landlords using short-term lets websites for longer tenancies.
“Short-term lets are supposed to be short-term for a reason and landlords who are not adhering to the rules could be putting the future of their investment at risk,” says Patricia Barber, chair of the AIIC. “We hope that this initiative will be introduced in other UK cities (Liverpool, Manchester, Bristol and Newcastle) with high Airbnb usage in the future.”Google+