George Osborne’s Budget may have done little to enhance his reputation, but the Chancellor’s new rules for small traders renting out rooms (or entire homes) looks likely to boost small-scale entrepreneurs.
In future, we will all be able to earn up to £1,000 through property lettings before paying tax. Platforms such as Airbnb and the London holiday rental firm Veeve predict a rapid expansion in the number of ‘hosts’ eager to hire out everything from an airbed in their living rooms to a luxury penthouse.
‘We’ve had a real influx of homeowners approaching us,’ says Veeve’s co-founder, Jonny Morris, who launched the firm in the run-up to the 2012 London Olympics.
Classy canvas: Gurt the Yurt in east Sussex costs £120 per night per family of four on Airbnb
‘The idea of home-sharing is increasingly mainstream and renting out your property to make extra income has become fashionable.’ Airbnb — which specialises in connecting property owners with travellers looking for somewhere to stay — has diversified rapidly.
Since 2011 it has grown from 50,000 listings to two million, with 60 million users in 190 countries including Greenland, Uzbekistan, Cuba and Sri Lanka.
Accommodation ranges from treehouses to castles and converted windmills. Hosts and guests rate one another after each stay, so cheerless hovels and light-fingered ‘guests from hell’ are weeded out.
Britain has 52,000 Airbnb hosts and the boom has also spawned hundreds of small businesses. Take property developer Bill Colegrave, whose apartment overlooks Portobello Market in West London.
‘I first let this flat to a tenant and made £16,000 a year through traditional rental,’ he says. ‘Then a friend told me she was renting out three Bermondsey properties for short stays on Airbnb. I put this apartment on there a year ago at £120 a night. It’s made more than £16,000 in the first six months, with a likely income this year of £30,000.’
Encouraged by this success, Colegrave set up a firm, managing a handful of London flats, some belonging to expat friends, using Airbnb to market them.
He takes 15 per cent of the rental, after Airbnb’s 3 per cent cut and organises the cleaning, changeovers, meeting-and-greeting and answering guests’ queries.
He attributes his almost 100 per cent occupancy rate to clean, affordable properties in a tourist mecca and daily updates on Airbnb’s website to keep each flat high up the listings.
‘Landlords can get twice the income from short-term rental, but most don’t have the time or the resources. We enable them to do so,’ he says.
Peter Hayes has rented out a double room with a four-poster bed in 600-year-old Caher Castle in Galway. It is let for €130 (£103) a night, though the castle remains a work in progress with visitor income funding the reconstruction.
‘I used Airbnb to avoid selling the castle,’ says Hayes. ‘We asked our first American visitors to give us some pointers. They were insisting we declutter and stop drying our bed linen in the living room. Once we made the changes, they gave us a great review.’
For many travellers, small is beautiful. Crofters Sue Hollands and Neil Robertson welcome guests to their cosy converted cowshed, Cleadale Bothy, on the Hebridean island of Eigg for just £40 a night. Though lacking hotel luxury, visitors say the sea views towards Rum are worth it.
By contrast, interior decorators Shaun Clarkson and Paul Brewster’s two Norfolk offerings, Carrington House and Cliff Barns, are exquisitely restored.
Each sleeps 18 and is booked months in advance, for stays at £120 per person a night and wedding parties. ‘We aim for the wow factor,’ says Mr Brewster. ‘We’ve had nothing but lovely guests’.
‘But Airbnb can be difficult to communicate with and though guests pay it upfront when they book, the firm holds on to the money until the day before people stay.
‘For our sort of business, though, Airbnb is so big and influential that it’s something you have to be a part of.’
TOP TIPS FOR PROPERTY LETTING SUCCESS
DESCRIBE your property accurately, with photos.
A BARGAIN rate early on will help attract guests.
UPDATE your information on the listings site regularly to help keep your property near the top.
MAKE sure it is immaculate. Poor cleanliness ratings will put people off.
GET INSURED. Airbnb provides up to $1million (£707,500) cover for loss or damage, but this does not take the place of the owner’s insurance.
CHECK small items after each stay. Unscrupulous guests have been known to ‘liberate’ cushions and ornaments.
LET your neighbours know you’re considering hosting.
SORT out any queries promptly.
LEAVE detailed instructions of how appliances work.
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