Real Estate

How Airbnb became key to turning homes into businesses

Summer is here: time to spend a couple of weeks in a stranger’s home abroad while letting your own to another stranger.

Airbnb has changed the way we view properties and the way we travel. As a user of the site I sometimes feel that all human life is there. Browsing recently, I came across properties ranging from a van parked on a Manhattan street ($80 a night plus cleaning charge) to an entire Norfolk stately home (£1,500 a night; I’m not sure if the butler costs extra).

But the site also finds itself at the centre of a wrangle over what, exactly, our homes are for. In London and other global cities there is a growing outcry over the claim that much-needed housing is being removed from the long-term rental market so that landlords can make more income from holiday lets. Amid a dire shortage of affordable housing, that accusation, if you can pardon the phrase, hits home.

Hence the row over ads recently placed on London transport by the property management company Hostmaker. “My long-term let is ticking along terribly,” they read. “But with our dynamic mix of short and long-term lets, your properties could earn you up to 30 per cent more over the year.”

Hostmaker knows its audience: landlords squeezed by a series of government measures such as stamp duty surcharges and cuts to mortgage tax relief, not to mention falling rents. But the company had reckoned without the canny campaign group Generation Rent, which staged a protest complete with hashtag, petition and photo opportunity featuring a campaigner wearing a mysterious animal head.

“These Tube ads are feeding a narrative that tenants are disposable, and profiteering from property is more important than providing long-term homes,” the group said. They urged the London mayor to ban the ads, but there was no need: within the week, Hostmaker had scrapped them.

Nakul Sharma, founder and chief executive of Hostmaker, says the ads were not intended to promote evicting tenants. Rather, he gives the example of a home suited to students: Hostmaker, which manages and advertises rentals, might let it out to tourists over the summer before agreeing a longer let to students when term starts.

His case, however, is not helped by a BBC investigation this year, in which a Hostmaker employee was recorded offering to help a landlord circumvent regulations — and Airbnb’s algorithms — to list a property for short-term lets year round. London rules limit short-term lets of entire properties to 90 days in any given year. Mr Sharma was “shocked” by the investigation, he says, adding that Hostmaker enforces all the rules. (The employee in question, following an internal investigation, has left the company.)

When Airbnb in 2017 brought in an automatic block for London properties whose landlords tried to flout the 90-day rule, the number of listings available in the capital dropped by 20 per cent, but it has since recovered, according to the data provider AirDNA. There are now almost 44,000 entire properties in the capital listed on Airbnb and rival HomeAway, but we cannot tell what proportion may be getting around the 90-day rule by switching around different websites or using alternate listings.

I know plenty of people who earn extra cash by Airbnb-ing their homes, entirely legitimately, while they are away. But I have also stayed in short-term rental properties that showed no sign of being anyone’s permanent home, and all the signs of being an under-the-radar cheap hotel avoiding the taxes levied on above board hospitality providers (who, to add to the complexity, now also list in droves on Airbnb).

Airbnb itself says the Hostmaker ads “do not reflect the spirit of hosting in London”. “Airbnb has always been the only platform to help London hosts follow the rules by automatically limiting how often they can share their homes. We have zero tolerance for attempts to get around our measures,” it adds.

In any case, Hostmaker’s business, with roots in managing short-term lets, is flourishing; founded six years ago, it now employs 220 people and about as many contractors, doing business across 11 cities in Europe and Thailand. It expects to reach £100m in sales this year. “Homes are being used in a different way,” says Mr Sharma. “Only 10 years ago your home was a private space where you put roots down.”

Homes have long functioned in part as financial assets. But ballooning house prices in global cities have sharpened the divide between property’s haves and have-nots.

The market, through Airbnb, has created more efficient use of housing in many respects; rooms and whole homes that would have been temporarily empty are now housing millions of satisfied travellers. Generation Rent has a point, though. Impromptu hotels are a step too far. Landlords, and start-up property managers, should resist the temptation.

The author is the FT’s property correspondent. Email:; Twitter: @JudithREvans


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