Over the past year or so Airbnb has been spoken of more and more as being a major thorn in the collective sides of most residential block managers. Greater access to and visibility of short term letting sites have led to many apartment owners renting out their properties. What they do not really appreciate is that in most cases their lease may not allow them to sublet their property, either at all or without permission. It is highly likely that short term lets will be prohibited. So the owner of a leasehold property, advertising and renting their home on a short term basis is most likely in breach of the terms of their lease.
It does not stop there. What about insurance problems? There is also a high chance that short term lets will affect both contents and buildings insurance. If an individual flat owner needs to make a claim on their insurance policy which is subsequently declined because they have been subletting it only really affects them. What then if a claim needs to be made on the block's building insurance and this is declined on the same basis? How many people will this impact upon? Who will end up paying the claim if the insurer won't?
Now consider the other implications taken from this article. It is indicating people are removing their properties from longer lettings and advertising them as short term lets. Who would blame them? They will get a higher price and potentially a better return on their investment. In time this may reduce the amount of available properties on the open rental market. There are already reports that people may move out of the rental sector when the new tax rules start to bite. So couple these together and we end up with a supply and demand situation where demand is greater than supply, resulting in prices going up. I guess we should be thankful the tenants of these properties have not started advertising them on short term lettings websites!!
Don't get me wrong, I am not against short term lettings, I think it's a great idea and works well for those letting their homes and for people looking to rent somewhere. Clearly there are a great deal of responsible owners who make a success of this without overstepping any boundaries. On the flip side, this article seems to demonstrate there are people who not only know they are committing a breach of regulations, but are actively looking at ways to do it.
I do believe we need more regulation and a better understanding of the implications. Short term subletting is costing many of our clients hundreds, if not thousands of pounds in litigation and I am only pleased we have not had to deal with a failed insurance claim as yet. If you are considering letting out your property, make sure you check everything properly to ensure you're doing it legitimately. If you're looking for a property to rent, do you know if the owner has the right to rent it to you? If you're facing a problem with somebody who is subletting without consent and you need some advice, please pick up the phone and we will see what we can do. www.brethertons.co.uk.
London boroughs have warned that short-term lets are pushing up longer term rental prices in the capital.