Airbnb is a digital marketplace allowing homeowners to list rooms or properties for holiday lets. It claims to list properties in over 190 countries across the world with over 60 million users since its creation. That said, it is has recently come in for criticism from the Residential Landlords Association for ‘compounding the housing crisis’.

These comments from the RLA have been made with particular reference to the London housing market where it is reported that there has been an increase of 27% in the number of London listings on Airbnb between February and June 2016. This takes the total number to over 42,000. Further, 61% of these properties are said to be listed for being available for more than three months.

The RLA also note that 41% of all listings in June 2016 were ‘multi-listings’ meaning that the owner had more than one property listed and that the number of entire homes or properties listed on Airbnb has increased by 24% to nearly 22,000.

From a legal perspective, there are a number of points to take from this seemingly increasing phenomenon.

Breach of Buy-to-Let Mortgage Conditions

Part of the reason behind the shift is that Landlords are recognising that higher ‘night by night’ rental prices are lucrative in comparison to the lower rental yields achieved on a longer term basis. However, it is highly likely that buy-to-let properties rented on the short-term basis promoted by Airbnb will be in breach of their mortgage conditions. Often, such mortgage conditions state that properties should be let on a long term basis underpinned by an Assured Shorthold Tenancy. This is so as to try to protect the borrower, the banks interest as well as the tenants. It goes without saying that there can be far reaching consequences of being in breach of your mortgage conditions including the possibility of the property being repossessed.

Rental Stock and the Protection of Tenants

As stated above, the reason for banks insisting on long term lettings underpinned by an AST is so as to provide protection for not only the borrower and the bank, but the tenant. One of RLA’s principle concerns with the Airbnb trend is not only the reduced amount of rental stock in the capital which could be argued to be fuelling the ongoing housing crisis, but the fact that tenants taking up these lettings are being placed in a vulnerable position without the protections offered by an AST.

Breach of Planning Permissions

The RLA has called on the Government and the Major of London to undertake a review of the policing of Airbnb to ensure that properties which are advertising lets of over 90 days have the requisite permissions. Appropriate planning permission is required for genuine holiday lets i.e. properties that are let for over 90 days. The concern being that many of the Properties advertised on Airbnb are not genuine holiday lets and are contravening the law.