Only 3% of landlords are currently active in the informal short-term lettings market, according to the National Landlords Association (NLA).
Of those landlords who do not offer short-term lets, a vast majority have not considered entering it, with only 24% of respondents claiming to have considered it at some point.
Ranging in length from one night up to around six months, short-term lets have increased in popularity in recent years following the success of platforms such as Airbnb and HomeAway. Landlords can generate significant income from letting their properties this way.
However, this could breach a landlord’s mortgage terms and invalidate their existing insurance policy. NLA says its vital for landlords to be aware of the problems it can lead to.
Richard Lambert, chief executive officer of the NLA, commented: “We had expected to see a slight increase in the number of landlords letting furnished holiday properties after changes to taxation were introduced in April last year. While this has not been the case for most of the UK, it is worth noting that 20% of landlords in Scotland do offer short-term lets.”
He said that holiday lets are treated very differently to other property portfolios in tax and regulatory terms. Where there is strong demand from temporary visitors, the decision to switch may be a ‘no-brainer’ for landlords, especially as there is no real downside and nothing holding them back from doing so.
“However, a shift of properties in a concentrated area to shorter-term letting can have a significant effect on the local rental market, reducing available properties and pushing up rents,” Lambert added. “There will always be unintended consequences when policymakers don’t make the effort to understand landlords’ motivations and behaviour.”
