Until very recently, there was an emerging trend of landlords switching to more profitable short-term lets, but with the recent coronavirus outbreak, many landlords are now looking to go back to long-term lets as demand plummets.
Back in February, we reported on the growing worry in the Private Rental Sector (PRS) that long-term rentals were becoming less profitable to landlords and causing them to switch to short-term holiday lets. This had the potential knock-on effect of reducing the supply of long term homes and driving up rental prices for tenants.
In recent weeks, however, the demand for short term holiday lets has fallen through the floor as people have stopped travelling due to the Coronavirus outbreak. Landlords who currently let out holiday homes and short-term lets are switching to longer-term contracts according to the UK Short Term Accommodation Association (STAA).
The STAA polled its members and found since 13th March, most members have seen around 70% of their booking cancelled, with some reporting as high as 90%, with proportionate losses in income.
Merilee Karr, chair of the STAA and CEO of UnderTheDoormat, said: “These findings are certainly not surprising but show that the short-term rental sector, that makes a massive contribution to the UK economy each year, is under severe threat. Bearing in mind that most of our members and their customers rely on tourism for between 70-100% of their revenue, the impact of the COVID-19 virus is potentially catastrophic.
“And, for those short-letting their home, the loss of both present and future income could be devastating. Thousands of people use the sharing economy to help pay their mortgage; for some, it is their primary source of income. Countless small entrepreneurs face going out of business, removing money from local economies both now, and in the future, when they will not be around to service demand once the virus has abated.
“On a more positive note, many homeowners, property management and hospitality companies have been making the best use of their assets by opening up properties for key workers. Schemes like NHS Homes, where properties are being offered to NHS staff as free accommodation show just how the short-term rental industry is pulling together to do their bit during this crisis.”