Growing numbers of property investors are using short-term lets to diversify their portfolios, and recent changes announced by Airbnb could see a major shift in the sector.
In a series of Tweets sent out last week, Airbnb boss Brian Chesky revealed that the company would be verifying every single listing on its site by December 2020, in response to a number of scams reported to have taken place recently through the platform.
The move is expected to be welcomed by the vast numbers of genuine hosts using Airbnb as a platform to rent out their properties, and by bringing more professionalism to the market it is expected to increase its attractiveness to a wider range of property investors.
The short-term lettings market is performing particularly strongly at the moment as people’s holiday habits change, and it is increasingly being used by investors looking to branch out from the traditional buy-to-let market. With the government’s crackdown on the private rented sector putting some landlords off, Airbnb and similar short-term letting options can provide a lucrative alternative.
What has Brian Chesky promised?
A new Airbnb Guest Guarantee, which will come into play in December, will provide more security and peace of mind for guests using the site, while the new verification measures will drive out the small number of rogue users flouting the rules.
Customers will be refunded if they fall victim to misleading listings, unless Airbnb can find an acceptable alternative property for the customers that is “just as nice”. There will also be a live phone line launched to help people in such situations.
We are introducing the Airbnb Guest Guarantee. Starting on 12/15/19, if a guest checks into a listing and it doesn’t meet our accuracy standards, we will rebook them into a listing that is just as nice — and if we can’t, they will get 100% of their money back.
— Brian Chesky (@bchesky) November 6, 2019
The rise of Airbnb and short-term lets
The number of people taking staycations in the UK is on the rise, while tourism to the country remains strong. This can in part be attributed to the effects the EU referendum has had on the value of the pound making it cheaper for UK nationals than going abroad, alongside people taking more environmental responsibility in the wake of heightened awareness of our carbon emissions. And with sites like Airbnb, it is easier than ever to book short-term accommodation.
For property investors, returns on a weekly basis can be significantly higher with short-term lets than with a traditional rental property. Liverpool has recently been named the highest yielding place for short-term lets, with yields reaching 27.2% based on an occupancy rate of 50% of the year. Manchester is another key city for short-term lets, and there are 10,200 active listings on Airbnb currently.
At BuyAssociation, we have access to a number of unique short-term let investment opportunities across the UK. See our investments page to get a snapshot of what we have to offer, or sign up for free for more exclusive access to all our opportunities.