What's the Air BnB market like in London at the moment?

[Puffykins]

We moved out of London two years ago, but I still work there and the commute is slightly killing me. I've come to the conclusion that what I need is a studio/ 1 bed flat in London, where I can spend 2/3 nights a week. I have a deposit of c.£80,000, and our house outside London is mortgage free so I hope that I can borrow the rest against our house (need to look into this) but one idea I had to help was Air BnBing the flat at weekends/ over the summer school holidays when I wouldn't be using it - but is there demand, does anyone know? I know that there's a limit on how many nights I can do this (90 a year) - but would I fill them? I'd be aiming to buy something in Notting Hill/ Maida Vale/ North Kensington (ideally Notting Hill) so an area that I think people think they want to stay in. I realise that I'm massively fortunate even to be in a position where I am considering this incidentally. But I'd love to hear from anyone who has done similar/ thought about similar/ or knows more about how this all works (I've never actually used Air BnB.)

Honestly - with the increased regulation, costs and tax implications around buy to let, and then the additional admin duties sround running an Airbnb (are you going to answer the call when they lock themselves out at 2am? Will you have a company running it? How will this eat into your margin?) I would just get a hotel 2 nights a week.

Are you planning on managing bookings yourselves/washing linen/cleaning etc or having a management company do that?

Pre covid, I worked abroad about 6mths of ever year and have a 2 bed between zone 1-2 which we used a management company to rent out whilst we were abroad. I have no idea about the current situation- but looking to do it for 90 days again, till we rent or sell it.

This info is pre-covid, so things may well have changed, and hopefully someone with more up to date info can help us both!

• Most management companies back then would only put properties on their books in zone 1/2
• We were given 2 options. 1 was a meet and greet where the management company opened the flat, and briefly showed the guest around, the heating/WIFI code/answered questions etc. A 2nd and cheaper percentage option for us was a key safe. This could be a box attached outside the property with a code, a box attached to a fence in a park nearby or a key being left at a 24hr corner shop nearby.
• We chose to pay the higher percentage for a meet/greet option. I couldn't imagine a family trying to find a locked key safe on a fence, behind shrubs in a park somewhere. Stuck on the outside of a property would have been fine- but ours wouldn't allow it.

There was an AirBNB forum you can sign up to ask questions which might be useful too. Sorry I have no recent experience though.

Thanks both. So, to answer the hotel question, I don't want to spend money on a hotel that doesn't turn into anything - if I buy a flat then I'm paying a mortgage and at the end I have a whole flat - which is great, because I love London, and also my DC could use it if they go to university in London/ want to work there when they graduate (I moved out of London under some considerable duress from DH.)
To answer the next question, I'd def need the more expensive option.... which I realise then eats into generated income etc,

A simple way to guage the market would be to bookmark half a dozen properties you think are of the same quality you think you can afford in the areas that you like, then regularly check their availability for weekends, i.e. are they free in a month from now, two? For this forthcoming weekend? Are they already fully booked for the May bank holiday weeks? How about the August ones, Christmas? How about during the July to September school holidays?

I would also suggest the Reddit London forum. They will know all. They may hate you for 'taking an affordable home away from a hard working Londoner' mind you, so tread carefully.

@KievLoverTwo thank you that's a good idea. And yes the affordable home 😬. I do feel some moral quandry, but I also feel like I am a Londoner trying to go home and I do actually plan to live in this studio/ 1 bed flat some of the time (which will become more of the time as the children get older.) I think that's also why I so want to buy something. I am homesick for London and desperate to go home.

How far from London do you currently live? You might be better with a “near commute” eg Wimbledon? Can earn a lot in tennis fortnight!

I now live in Hastings. I hear you re Wimbledon, but I grew up in West London (Notting Hill/ North Kensington) and need to go home. If I can.

Have you considered buying a slightly bigger flat but on the outskirts and renting one of two rooms out to a London commuter via Spare Room on a Monday to Thursday only let? They are quite common setups, and most Londoners would kill to have a mostly absentee landlord.

With decent lodger, you should be able to check when they are on holiday from work and use the flat for your family visits during those times.

Buy a flat and rent it out to full time tenants, not airbnb, until needed for your children. Use the rental income to finance hotels as and when needed.

in most parts of central london, you need planning permission to rent out a flat on AirBnB or similar for more than 90 days per year. and it is rarely granted because AirBnBs don't contribute to the neighbourhood.

so either you have v limited days to rent out or you have illegal tenants.

because of this, there is less supply of places and more demand. but it is still hard work and not good value often. you need a cleaner twice a week (before & after your visit) and a management company etc.

when my aunt had to move into a nursing home (dementia), we (the family who managed her affairs) put her flat was on AirBnB for a while (via a management company). there were always issues and expenses and complications. and the more hand-overs, the more complications.

if you were going to the AirBnB option ONLY in the summer when you aren't there, that might work. but I wouldn't be doing cleaning and handovers twice a week every week of the year and you wouldn't get permission for that either.

OP needs a mortgage, any rental income would be financing that.

Hotels are massively expensive now vs pre covid - probably cos a lot of people are living far away and doing 1-2 nights a week in London.

OP

Maybe try booking a week in an Airbnb in your chosen area and see what it’s like?

There are other sites that rent flats short term eg booking.com - do a bit of comparing fees for owners?

That’s a good idea as long as the sums work out. I assume you get less rent than air bnb but consistent income and if enough would help finance the mortgage and the hotel.

I'm in a similar situation and the handovers seem to be complicated to manage. I think you're better off buying a 2 bed flat somewhere in zone 2 and maybe doing short term rentals to students to a university nearby or like PP mentioned, renting to a lodger. Don't forget that the first £7500 are tax free if you rent a room in your flat. I was looking on spare room and there seems to be some demand for part time lodgers in the same situation as you - people who want a room for 2-3 nights a week, but a more long term arrangement

Yes, A more consistent rental income and no airbnb management fee, though you may still have rental agents fees unless you can manage that yourself.

Also you can let it unfurnished so no purchase or replacement costs for furniture, bedding, kitchen equipment etc.

Less hassle all round I'd have thought.

First £7500 is only tax free if you let a room in the house you live in.

Renting out somewhere as a Airbnb is fine in some scenarios, but when you live in it yourself,
I wouldn’t want to rock up knackered on a Tuesday night and find the place had been trashed, the neighbours raging because of an all night party, and someone has shat the bed.

Yeah, my OH needs a hotel in May after last getting one in May 2021. He is not a fancy man looking for fancy places. He tells me his £80 hotel is now a minimum of £200.

Depressing.

Worth trying Ealing Broadway - Elizabeth line means fast to the centre but prices haven’t gone up quite as much

I think he has to go to the excel in Canary wharf and he is absolutely dreadful at mornings (and busy commutes stress him) so unfortunately I think we are just gonna have to suck the cost up for him being a bit special. But I will mention the hotel to him anyway, thank you.

Yes, the hotels are all really expensive now. Thanks all for the info - all really good food for thought. I think maybe letting it just over the summer might be the way ahead, if we do this. Basically, it occurs to me that I could easily spend as much on hotels as a mortgage is, and I'd rather spend it on a mortgage and have a home. And then I could bring the DCs up at weekends too, so that they can see their friends etc. If I can manage the finances....

Also be aware that it's fairly common for a flat's leasehold agreements to prohibit short sublets i.e preventing AirBNB etc and doing it means you are in breach of your lease. So if you do buy somewhere, make sure you check this isn't the case before you buy.

A friend of mine used AirBNB to rent his spare room in his Brick Lane flat. He ended up with a man who needed to be in London Mon-Thurs for work and eventually they agreed to set up a more long term arrangement. It was ideal for my friend as he got his flat all to himself at weekends and had a nice, decent guy paying for a few nights every week. But obviously that's the opposite of what you want OP. My friend did sometimes let his spare room out at weekends for a while but found he seemed to get lots of bookings from young couple (kids really) who wanted a shagpad for the weekend. Not ideal. He stopped doing weekends.

The 90 day rule is automatically applied to air bnb listings in London. You need planning permission to overcome it.

Hmm, I would say that unless you can easily afford it, don't buy it. I can't see how you could make a significant amount of money to make it worth your while with the air bnb - especially as you are only looking at 1 beds.

Also, I am in zone 1 in a flat in the kind of building I imagine you are likely looking at (as you mention Kensington and NHG) and there is no way no chance the lease - or the freeholders - would let you do this.