The AirBnB Effect

  • 2 years ago

Worldwide and Closer to Home

The consistent increase in the number of AirBnBs in Britain comes with great joy to those looking for ‘staycations’ and cheaper alternatives for accommodation across the country. Home-sharing platforms are dominating the tourism market, with AirBnB leading the way. The rented accommodation giant has a network of upwards of 3 million properties across the globe, beating even the largest of hotel chains on several factors. However, not everyone is ‘for’ the new craze of short-term rental apps.

Tourist accommodation can be very positive for communities, especially smaller towns/cities, and areas outside of the major tourist attractions, as it allows for the positive economic impacts of tourism to be distributed across regions.

Roughly 74% of AirBnB listings in major cities are located outside of traditional hotel districts, and approximately 42% of guest time is spent in the areas in which they are staying. Therefore, AirBnBs have a positive economic effect on neighbourhoods which are often over-shadowed, right?

Well, not quite. Although it could be argued that local businesses benefit massively from increased tourism, and the local community is therefore improved, the ‘AirBnB Effect’ may actually be causing a lot more harm than good. Over-tourism, a problem caused by increasing short-term rental (STR) availability, can have a negative effect on housing prices for local communities, and the effects of the AirBnB effect are similar to that of gentrification in some cases. Increased tourist presence can also cause businesses to up their prices, due to increased demand for their products and services, (and because they can!), further impacting residents.

Increased STRs slowly increase the value of an area, therefore encouraging the relocation of residents to elsewhere, due to being unable to find affordable housing options, including the purchase and rental of properties! The appeal of switching to STRs also creates a shortage of long-term rentals (LTRs), contributing further to the lack of available housing in some areas. Less available stock = higher rental costs. All these factors create the problem that is the AirBnB effect, which is slowly beginning to detriment local communities, specifically those with lower incomes. Homeowners may even be inclined to remove their property from the For Sale market to be used for STR, as the profits involved can be so great.

Some cities have officially acknowledged the AirBnB Effect as the crisis it has the potential to be. Amsterdam has established an ‘AirBnB Law’, which limits STRs to 30 days and bans this type of renting in certain central areas. Proprietors also have to follow a set of rules set out by the city, some of which include; they must only let out their property short-term occasionally, they must pay tourist & income tax on their earnings from their AirBnB, and a condition regarding local disturbance from guests.

Berlin also has some laws regarding AirBnBs, where landlords can rent out their own home short-term as much as they like, however, if it is their second home or holiday home, they can only do so up to 90 days out of the year. AirBnB owners must also acquire a permit to rent out their own home, if renting out more than 50% of the total area of the property, on a short-term basis.

These laws were passed to work as a deterrent for property owners to sign up for short-term letting arrangements, to restore some stock to the LTR market, and potentially bring down rental costs as a result. However, very little is being done to truly resolve the issue, especially in the UK. Although London had regulations introduced whereby owners could rent out their home on an STR basis for a combined 90-day total per year, other parts of the country affected by this issue have largely been ignored.

An example close to home in Kirkby Lonsdale. In the heart of the Lune Valley, there is no wonder Kirkby is such a popular tourist destination. However, locals are starting to notice that the availability of LTR stock in the area is dwindling, with affordable rental options practically non-existent. Residents have taken to social media to voice their complaints, but little is being done in the north of the country to combat this imbalance between short and long-term rentals.

The for-sale market has also felt the effects. Many property owners have taken their properties off the market and instead turned to home-sharing platforms to profit from second homes. After the boom in property sales during the stamp duty holiday, many of these purchases have been converted to Air BnBs, or similar, post-lockdown.

However, AirBnB’s popularity does also create a new selling point for some properties, especially those with annexes or outbuildings, or the potential for the erection of extra accommodation. Lots of buyers are now looking to profit from their property purchase, whilst still moving into a new home. The 2022 property market is one of extreme buoyancy, so the appeal to buyers of potential AirBnBs is a great advantage for those trying to sell.

So, what could be done? Perhaps the government needs to adopt more Air BnB laws across the country, not just a 90-day restriction in the capital city? Should there be a tax and location restriction like in Amsterdam, or an introduction of a permit, like in Berlin?

The perfect solution is unclear, but we hope to see positive improvements regarding the housing crisis from the British government in the future, especially in the North of England.

If you have any questions or concerns about anything property-related, please do not hesitate to contact us. You can call us 7 days a week on 015242 56625 or email, We are always here to help!

Lily | Sales & Marketing Assistant

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