Is this the end of Airbnb?
What is the impact of the Covid-19 crisis on short-term rentals, especially in Central London and areas such as Soho, Covent Garden, Marylebone...? Is the whole rental market affected and how to tackle the situation when you have been renting your property on a short term basis until now?
COVID-19 has had a significant impact on the economy including the property industry. The short-lets market has probably been affected the most by the outbreak, due to travel bans imposed by governments across the globe, and this has verified especially in Central London areas such as Soho, Covent Garden or Marylebone, particularly attractive for tourists. Consequently, holiday lets have plummeted which left property owners with no income and no prospect of improvement.
Our offices are experiencing a significant number of owners of short-let properties to shift to long-term letting, because of the collapse of the tourist market. We have been approached by numerous owners of vacant properties, who are desperate for income, to secure a tenant. The sudden surge in available rental accommodation will likely cause falling rental prices in the short to medium-term.
Furthermore, university campuses have been closed due to Covid-19 - and there is uncertainty whether there will be in-person teaching in the autumn or whether classes are moved online. Many landlords and owners of Houses of Multiple Occupation (HMO) have reported that students have left their properties and returned home and there are no signs of when they will return. We have been able to witness this in the Bloomsbury and Russell Square areas where international students like to live, close to their university.
Renting to students, especially when they were from overseas and from extremely wealthy backgrounds, had been very lucrative. But what if these students are not returning to London in the foreseeable future? The result will inevitably be a return to longer lets and a reduction in rental prices or to offer their properties for sale.
A lack of clarity surrounding Brexit over three years led to pent-up demand, which was not entirely serviced by the time the Corona crisis has hit the UK. Those buyers will still be around after the lockdown is over and the demand for housing will grow over the next few months for those who need to move. Pent-up demand in combination with low interest rate mortgages suggest that the property market will remain stable.
There are also more people, who have time for browsing the internet during the lockdown. Property owners and their estate agents could use this time to drum up interest. In addition, property owners might find that this is a good time to get their property ready for sale and to prepare various bits of paperwork that is necessary for the selling process.
The Covid-19 crisis has also led to a rise of virtual tours, where buyers can navigate through a home using 3D images. At Greater London Properties, we are investing in this new technology and we already managed to put two properties for sale under offer simply by enabling buyers to virtually walk through the properties.
The uncertainty of how long it will take to return to normal is causing distress amongst property owners. We, at Greater London Properties, have been tirelessly advising landlords and vendors during these unprecedented times and we would be delighted to talk to you too before you make the decision whether to let or to sell your home. If you would like to find out the value of your property you can also use our free Social Distancing Valuation here.