The luxury housing market in London has been weak since Brexit and homeowners in the city have struggled to find buyers or long-term renters. In an attempt to recover some income for their properties, they have been reaching out to Airbnb and other brokers for short-term rentals, reports Bloomberg.
The number of London properties listed on Airbnb nearly doubled in 2016, according to research from JLL. And while homeowners see the benefits of Airbnb and short-term brokers, London Mayor Sadiq Khan is wary of this trend, explaining that the rise of short-term rentals will mean permanent residents in housing strapped London will have fewer options available.
Something many of these luxury property owners in London don’t realise is that the city has regulations in place to limit short-term rentals for entire homes to 90 days. Last year, Airbnb moved to ban London listings for longer than the permitted period, but owners have still looked for ways around the rules, reports Bloomberg.
Some homeowners decided to put up their properties for rent while they wait for real estate prices in London prices as well as the pound to recover, tells Knight Frank Associate Tom Bill to local media. The number of homes now available to rent in London’s most expensive locations increased by 20 per cent from September 2016 to February 2017. Investors have been the most aggressive trying let homes in order to prevent losses from building up.
“Demand in the long-let market has not been very strong after the Brexit vote, but property owners need to maintain their profit. The price-to-rent ratio is far less than investors expect,” says Gao Xiang, President of JC International Property.
More luxury homes are coming with 35,000 new high-end London properties scheduled to be completed by 2020. Despite this increase in planned properties, sales of London homes under construction dropped to its lowest in 4 years in 2016. Developers of these projects now have a record inventory of unsold properties with only limited interest.
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