In a rapidly growing market, some areas of London now average a huge £224 price tag for just one night.
The boom in rentals is backed up with some pretty impressive stats; the average monthly rent for a 2-bed property in the Capital is currently £1,777.
Portico expect at least a 70% occupancy rate on their Airbnb rentals, which at the average rate of £106 per day comes to a healthy £2,226 – a gross profit of £449, plus the added benefit of occupying the property yourself for 30% of the time!
Traditional agents are latching on to the potential business opportunities the ever-growing platform can provide.
Portico now offer an instant Airbnb valuation as well as a full management service made specifically for would-be Airbnb landlords, including a ‘Concierge’ option that includes “setting up your Wi-Fi, furnishing the property and maximising the appeal of your home.”
MD of Portico, Robert Nichols, was glowing about the platform, “Londoners in their thousands are turning to Airbnb as a way to generate extra income…even seasoned landlords are coming round to the fact that a combination of Airbnb and traditional tenancy will maximise their return on investment.”
Chancellor Phillip Hammond recently threatened to scrap ‘rent-a-room’ relief for short term lettings, which allows homeowners who rent out their spare room a £7,500-a-year tax free income perk.
He seems to be targeting the rental sector, after announcing last year that he would ban tenant fees for rental properties – a move that saw Foxtons take an eye-watering 20% hit on their share price overnight.
It isn’t the first time Airbnb have been blighted with government intervention; hipster hotspot Berlin has banned the platform entirely, dishing out hefty €100,000 fines to those who try to let more than 50% of their apartment on a short-term basis without a permit from the city.
DMZ aren’t surprised agents such as Portico are looking to take market share from what is becoming an increasingly busy sector – 4 million guests have stayed in Airbnb properties when visiting London, 3 million of those guests have chosen the capital in the past 2 years alone.
The only black cloud looming on the horizon is futher government intervention. The Chancellor looks hell bent on meddling with both short and long term lets in any way he can. DealMakerz finds this curious as Hammond has been directly involved in the property industry for decades and surely understand the pressures it’s under better than most.
However, the sheer power and size of Airbnb has proven too much for most cities around the world, only Germany’s rent controlled capital Berlin has taken a stand against the rental giant.
As house prices in London continue to increase, the traditional rental market will grow alongside sub-sector’s like short-term lets. We expect big things from Airbnb management offerings – watch this space.