Nationwide accomodation provider Airbnb is set to lose out on more than £325m this year as a result of a new cap limiting short-term rentals to 90 days per year.
The company last month announced that landlords using their platform will no longer be able to let out an entire home for longer than three months, in a bid to curb London’s housing crisis.
But the cap – which will become effective from spring this year – will have a disastrous effect on the company’s profits.
According to data from accommodation search engine AllTheRooms, almost half of Airbnb nights booked in London – Airbnb’s second-largest market – will be threatened by the 90-day cap.
While many travellers will just look at different listings on the platform, many will come off the platform altogether, AllTheRooms said, leading to a more than 30 per cent drop in London bookings.
As a result, Airbnb could lose more than £325m in bookings.
AllTheRooms said it now predicts London reservations will rise from $600m in 2016 to around $812m in 2017. Before the 90 day cap was introduced, the company said it foresaw a jump to $1.24bn.
Airbnb disputed the research, telling The Independent that availability in London was “not an issue”. A spokesman said: “We are confident that there is a large range of unique homes for guests to choose.”
The spokesman added that Airbnb’s customers would simply switch to other rooms on the site.
The typical Airbnb host in London can earn £3,500 tax free by sharing their space for 50 nights a year.
The rules impact landlords who rent out entire homes for longer than three months in a year.
From spring 2017, unless hosts can show that they have the required permission to share their space more frequently, they will have to restrict all short-term lets to under 90 days.
The new rules do not affect people who rent out individual rooms within their homes.
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