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/ 05 Dec 2016

Let it BnB

With Airbnb facing legal struggles around the world, what does its future hold in London?

Airbnb has this week taken the step of blocking its landlord users from renting out their properties for more than 90 days a year. The move comes amid growing pressure on the company both here and abroad to mitigate the negative effects that some have attributed to the rise of short-term internet-based lettings.

In a recent interview with the Evening Standard, Airbnb’s co-founder Nathan Blecharczyk defended the growing role his business plays in London’s economy, claiming that the website is ‘part of the solution’ to London’s housing needs. However, lawmakers around the globe have seen things differently, with the company’s rapid expansion threatened in a number of key cities.

London Mayor Sadiq Khan recently expressed concern that short-term lettings put further strain on the housing stock and reduce supply for London residents, suggesting that new laws may be needed to counter the danger. He also pointed to the possibility that increased anti-social behaviour might be experienced by neighbours of whole properties that are rented out to short-term guests. Others have complained about the ability of businesses to use the site to run de facto hotels without paying appropriate taxes or complying with health and safety requirements.

Around the world, legislators have been taking steps to address these perceived problems. Last month New York City passed a law making it illegal to rent out properties for less than 30 days if the owner is present. The company responded by filing a lawsuit which settled last week. Barcelona last week fined Airbnb and its competitor HomeAway €600,000 each for allegedly marketing lodgings without the required tourist permits. Berlin has made short-term lettings of whole flats illegal, with a €100,000 fine for those who breach the law.

So will London follow suit by using the law to inhibit the expansion of short-term lettings? It is in fact already illegal to rent out a property on short-term lettings for more than 90 days a year – a law which is extremely difficult to enforce. It could be that Airbnb’s latest step was intended as a demonstration of willingness to help enforce the law and thus pre-empt calls to introduce more stringent legislation.

Airbnb and its competitors do have an important part to play – and their popularity cannot be denied. The tricky thing for local authorities, City Hall and Parliament will be to ensure that such sites are allowed to operate freely without putting more pressure on the city’s squeezed housing stock. This latest move shows that Airbnb may be willing to co-operate in achieving that goal.

Tim McLeish, Trainee Solicitor, Property Department

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