London's Airbnb Wild West: Capital 'hollowed out' by short-term lets eroding private rental market

A “Wild West” of Airbnb-style short-term lets risks “hollowing out” London, it was warned on Tuesday, as one borough revealed it was investigating a record 2,400 properties for abusing rules.

Westminster has more than 10,500 homes being used as holiday lets amid claims some apartment blocks are hosting more guests that The Ritz hotel each night.

Suspected brothels, party pads with a “revolving door” of revellers and severe overcrowding have all been uncovered in short-term properties during council probes.

The town hall said it received dozens of complaints from residents every week about short-term lets.

They are devouring housing stock, as well as affecting the local hotel trade, the council has claimed.

Across the capital, more than 455,000 stays were booked in short-term lets between July and September last year via three major online platforms, according to the Office for National Statistics. Over the same period there were some 86,500 properties available to rent in London on Airbnb alone, analysis by Benham & Reeves suggests, up nine per cent from the previous quarter.

New controls designed to ease the housing crisis and help prevent local people in tourist hotspots being terrorised by noise were announced by the Government this year.

The changes mean landlords will need permission from the council to turn their home into a short-term let. Housing Secretary Michael Gove said a mandatory national registration scheme would also be introduced.

The rules will not apply to those renting out their main home for fewer than 90 nights a year, and only new short-term lets will require planning permission, with existing ones automatically reclassified.

Announcing the proposals, Mr Gove said: “We know short-term lets can be helpful for the tourist economy, but we are now giving councils the tools to bring them under control so that local people can rent those homes as well.”

But London has had the 90-day rule in place since 2017 and the announcement sparked fears among councils that unscrupulous landlords, who are already breaking the cap, could automatically reclassify thousands of homes as full-time short-term lets.

Tuesday’s Standard front page (Evening Standard)
Tuesday’s Standard front page (Evening Standard)

Westminster council leader Adam Hug said “a Wild West of short-term lets” risked “hollowing out our capital by eroding the private rented sector, increasing costs for local authorities and undermining communities across the country”.

Mr Hug has today written to the Government to warn that automatically exempting existing short-term lets from needing planning permission will create “an effective amnesty for years of rule-breaking, anti-social behaviour”.

“It is our view that given the high number of cases under investigation, a high proportion of the 10,500-plus properties we know are being used for short-term lets in Westminster are breaching the 90-day limit and would be lost to use as full-time short-term lets,” he said.

“During a housing crisis to put beyond use what is at least three times the total number of homes required annually as identified in the Housing Delivery Test would be beyond negligent.”

Mr Hug also warned that attempting to adjust the planning system before councils had a sense of how many properties, and potential planning breaches, they were trying to handle “puts the cart before the horse”.

“This would be particularly reckless, at a time when the council are investigating a record 2,400 properties... as allegedly being used unlawfully for short-term letting,” he said.

Mansion block with more short-term lets than Ritz has rooms

Residents at the Park West mansion block, a stone’s throw from Hyde Park, complain they are plagued by loud parties and overcrowding.

They say visitors who book flats via short-term letting companies are “shattering their peace” and the luxury apartments have become a “revolving door” for tourists.

More than 100 of the 530 flats at Park West are suspected to be listed on holiday let websites and Westminster council says it is likely the block is hosting more guests a night than the Ritz, which has 111 rooms and 25 suites.

One woman, who has lived there for two years, said: “There are people wheeling suitcases in at all hours, even 2.30am. There are so many people here in and out, and it does feel a bit sketchy.

“A lot of the people coming for a couple of days don’t have key fobs for the main gate so they queue behind me when I’m going in. It does feel too much.”

A resident in his forties, who has lived in the block for more than a decade, said he had complained to Westminster council and property managers.

He told the Standard: “The sense of community has been lost. It’s a revolving door and our peace has been shattered. Airbnb are taking over, it seems. They seem to get round the rule that says they can only rent for 90 days a year somehow.”

However, a woman from the Gulf, who has come to London for a health procedure and is staying in the block, said the short-stay accommodation was ideal.

She said: “I’m happy here, it is central and convenient and people need somewhere to stay. I don’t see a problem.”

Mark Jenner, company secretary of Highdorn, which manages Park West and other buildings, said previously: “We fight these battles in many of our blocks. We fight it as hard as we can, but it’s a losing battle.”

“The idea these and many more could be legitimised, without scrutiny, at a time when we have never had so many investigations into non-compliance is entirely unacceptable.”

A spokesman for Airbnb said the typical London property on its app was rented for just three nights a month and it had partnered with local authorities to investigate rule breakers. It supports the protections of London rules and the government’s crackdown proposals.

The company is the most well-known short-term lets businesses, but in reality there are a plethora of different websites where properties can be listed and bookings made, meaning landlords can easily skirt around the 90-day rules.

Westminster’s cabinet member for renters Matt Noble said it was “obvious” the 90-day limit on short term lettings was being “widely abused.”

Since August 2023 Westminster council has served 78 planning contravention notices on houses and flats suspected to have operated for more than 90 nights.

Fines of £20,000 can be imposed for those who breach the 90-day rule but investigations are costly and breaches hard to prove.

Local authorities have asked for a comprehensive register, by the end of this Parliament, to get a firm record of the short-term lets in their areas and if they are being used as permanent holiday homes.

About 90 per cent of the 118 properties at Forset Court, a block next to Hyde Park, were being used for holiday stays, Westminster investigators found.

Residents at the Park West apartment block opposite have complained of loud parties and overcrowding “shattering their peace” as revellers rent out flats almost every night of the week. Both blocks are said to be accommodating more tourists than the Ritz each week.

An analysis of 2,800 short-term lets available in the capital over the past three years found that more than a fifth had previously had longer-term tenants.

An Airbnb spokesman said: “We have enforced restrictions on short-term lets in London for more than 6 years, partnering with local authorities to investigate and take appropriate action where there are concerns about a listing breaching London regulations.

“The typical listing on Airbnb is rented for just 3 nights a month - far less than the London 90 night limit - and four in ten Hosts say they use the extra income from hosting to help them afford the rising cost of living.

“We have led calls for national short-term let regulations to be introduced since 2019 and we welcome the Government’s announcement that there will be new rules across England.”

Commentary: Why this is bad new for generation rent

By Matt Noble, cabinet member for renters at Westminster council

There’s no question that short-term let companies like Airbnb have revolutionised travel and allowed people to see the world on a budget.

But there is a downside to this in London. Since the end of lockdown, the short-term letting boom has returned in force.

Whole buildings are being hollowed out into virtual hotels; indeed, one apartment block in Westminster became well known for offering more rooms than the Ritz on a nightly basis.

It is obvious the 90-day limit on short-term lettings is being widely abused and the council is investigating 2,400 suspected cases of abuse of the system — the highest figure ever.

We believe lax legislation being proposed by the Government risks ringfencing thousands of short-term let properties away from the “normal” private rented property market. This is bad news for “generation rent”. My council job title is cabinet member for regeneration and renters — a challenging role as rents rocket across Westminster.

The Government must act to ensure people who were born or work here have some chance of living here. The council is delivering affordable housing but we can’t magic stock out of thin air.

Short-term lets are a long-term housing crisis. It’s time our renters got a fair deal.

You can hear this story on today’s episode of The Standard podcast.