This year, we launched ‘Mountgrange Host’ to help our clients get the most out of the booming holiday letting market. Less than 3 months in, and with no real publicity, the uptake has been extraordinary.
Many of our landlords see it as complimentary to long and short let rentals as they can take advantage of their 90-day allocation between tenancies. Our vendors can also generate some income and possibly give their property a ‘breather’ from the market while looking for a buyer. Lastly there are those homeowners wanting to earn extra income while they are on holiday or away on extended business trips.
Done properly, holiday letting is a great idea, but there are potential traps that can leave homeowners vulnerable.
Not all management companies are the same
With its worldwide presence and huge success over the last 10 years, Airbnb has re-invented holiday letting. Off the back of this, many ‘management companies’ have sprung up to take advantage of this lucrative market.
We have years of experience working with landlords and tenants. We understand the dynamics of short-term letting and most importantly, know the rules and regulations, and the implications of breaking them.
However, a BBC undercover investigation aired in February found that many management companies were giving their London clients bad advice on how to get around the 90-day limit imposed on holiday letting.
The 90 days is not just a limit it is the law. Landlords cannot legally rent out their homes in the capital for any more than this. Anyone advising their clients that they can let their properties for longer is putting them at risk of prosecution and a £20,000 fine.
In the BBC report, management companies were secretly recorded telling undercover reporters how to sidestep the law. Techniques included using multiple holiday letting sites and updating photography to make old listings look as if they were brand new.
Airbnb says that it uses software to stop users from renting out short-term lets for longer than the 90-day limit. However, the BBC recorded a senior employee from a management company who openly said, “We do a new listing for you. We delist this one, start from scratch again. We will do fresh photos. If you use existing photographs, Airbnb’s algorithm tracks it as the same property. We do everything new. And then your 90-day ticker will start from scratch again.”
Commenting on this sort of advice, Housing lawyer, David Smith, said, “They are misinforming and misleading the people they are dealing with by suggesting to them that what they are doing is not unlawful. It is and it should stop.”
Why was the 90-day rule imposed?
In 2016, Airbnb commissioned the Institute for Public Policy Research to investigate the impact of short-term lets on London’s rental market. The report showed that at that time, 11% of Airbnb’s entire home rentals were let for more than six months of the year.
The new 90-day ruling was intended to put a stop to this because of the pressure that holiday letting has put on long-term rental prices in London.
The lettings industry, landlords and their agents are heavily regulated, and quite rightly so. In our opinion it’s only a matter of time before the government imposes the same levels of regulation on holiday letting. In fact, in a recent webinar hosted by ARLA (Association of Residential Letting Agents), they hinted that regulating the Airbnb market was their next “project”.
The decision to set up our own Host service was partly driven by the anticipation of this regulation. With our existing management department who are second to none we are perfectly placed to advise on all aspects of existing regulations and ensure that our clients’ properties are fully compliant.
Letting someone else do all the hard work
There’s more to holiday lets than putting a listing on Airbnb, popping some milk in the fridge and handing over your keys.
At Mountgrange Heritage, we’re investing years of expertise into making sure that our new Mountgrange Host service works for our clients.
From preparing your flat or house for the market to vetting guests and organising repairs, our property management experts can handle everything for you. You get the most out of your property and we worry about everything else.
Read more about the BBC report here.
Read more about our Lettings Team.