Should there be tougher controls on Airbnb to halt rent hikes?
PUBLISHED: 06:00 15 August 2020
As Airbnb goes ‘back to basics’, are people who rent out properties in Norfolk at an unfair advantage – or entitled to be making a bit of cash on the side?
A Norfolk councillor has slammed second-home owners for taking properties out of the local market by renting them on Airbnb.
What started 12 years ago as a rent-a-room scheme aimed at people wanting to make a quick buck by letting out part of their own home has grown into a huge property empire which last year generated $117 billion across 30 countries.
But up until recently, there’s been little stopping some abuse of the system by big property investors or portfolio owners using the platform for huge gains. There has even been examples of Airbnb users inventing a fake ‘host’ on the site to promote their houses.
Bob Lawton, from West Norfolk and King’s Lynn Borough Council, overseeing the Brancaster ward which covers popular second home spots like Holme-next-the Sea, Old Hunstanton, Thornham and Titchwell, firmly believes such people renting on Airbnb should be treated the same as other business owners.
“More regulation is needed, they are greedy people, that’s what they are, taking the mickey out of the system,” he said. “They should be charged business rates. They are taking housing out of the local market, those homes then sit empty for a while, and locals can’t afford to buy them.
“Affordable housing – that’s a couple of hundred thousand or more and people on local wages can’t afford that, more needs to be done.”
Some property business owners are abusing the Airbnb model to rent apartments and rooms in developments because it is easier and cheaper than advertising using other methods. It is claimed they get at an unfair advantage compared to hotels and guesthouses in terms of avoiding paying business rates or having to apply for a licence. And there’s a big question mark over what level of service these people are offering the customer.
If a ‘host’ is in fact the owner of a huge firm living far away, it might be more difficult to get hold of them if the renter needs assistance or if a problem during their stay.
However, it now appears change is coming from the very top at Airbnb.
The online behemoth’s boss and founder, US entrepreneur Brian Chesky, is pledging to remove the huge hotel chains and big property portfolio owners from the site and is looking at creating a rating system of hosts on how accessible they are to guests.
He recently said his aim was to “go back to basics”.
“Going back to our roots is not going backwards, it’s going back to what really captured people’s imagination in the first place,” he said. “We need to get back to basics, back to what is truly special, everyday people who host in their own homes, it’s a big job to do and we need to move quickly.”
Many people renting on Airbnb are sticking to the rules and using it because it offers more flexibility than buy to let and the chance for the owners to use the property as well.
Louise Coster rents a cottage in Hingham on Airbnb but during lockdown offered the use of it completely free for NHS frontline workers. She has now reopened and it is fully booked until October as well as for Christmas and New Year.
“I use Airbnb because I really enjoy meeting the different people, I’m a people person,” she said. “I try to find out a bit about the people coming to stay so I can tailor their visit. If they’re coming for their wedding night, I’ll buy a bottle of champagne to make it extra special, if there’s children, I’ll buy them some cookies from the local bakery.
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“But Airbnb isn’t an easy way to make money, you’ve got the cleaning and you need to constantly buy sets of bed linen and towels.”
Compared to using an agency, which Mrs Coster used to do, she said she liked the immediacy of Airbnb, and the come-back in the event of a bad guest. On Airbnb, as well as the guest being able to review the accommodation, the host can also rate the person staying.
Greta Neiss, a former communications worker, who lives in Norwich, rented two rooms in her own home for two years on Airbnb and loved it. “I’d worked long hours in a demanding role in my former job and I’d always liked the idea of running my own B&B so Airbnb was a great way to explore this.
“The platform is really easy to use. I had one double room with an en suite and a single room and my yearly occupancy was 95pc, my guests ranged from single men visiting parents, single ladies working at the hospital and I had couples visiting Norwich or their children at the UEA. I thoroughly enjoyed hosting and had some fantastic guests who would book many return visits.”
History of Airbnb
Airbnb was founded by Brian Chesky in the US when he rented out an air mattress in his living room to offset the high cost of rent in San Francisco. What started as AirBedandBreakfast.com got shortened to the catchier Airbnb.
The firm does not own any property but acts as a broker, receiving a commission from each booking. It also holds the payment of the property until after the guest has left – making interest on the monies held globally.
In April 2009, the company received investment from Sequoia Capital.
In June 2012, Airbnb announced its 10 millionth night booked, doubling business in the previous five months.
By October 2013, Airbnb had served 9 million guests since its founding in August 2008. Nearly 250,000 properties were added in 2013.
During the coronavirus pandemic, Airbnb suffered a significant drop in bookings, estimated at between 41% and 96% and in May this year Mr Chesky sent a memo to all employees announcing the company would be laying off approximately 1,900 people.
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