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The Airbnb Effect – The UK’s Housing Crisis & Rental Reforms

Roar Staff Writer Leah Napier-Raikes takes on the UK’s housing crisis, linking it with the rise of the short-term lets and the uptick in housing prices this has caused.

In the UK, house prices have alarmingly soared to 8.8 times the average earnings, more than doubling since the 1970s when the average house price was just £9,277 (equivalent to £68,493 today). Fast forward to this decade, and the average house price has skyrocketed to £286,489, marking a staggering 318% increase. Meanwhile, average earnings have only risen by 94% to £32,432.

This discrepancy is pricing many out of the property market and leaving renting as the more ‘accessible’ option for UK residents. However, rent in the UK continues to increase, rendering tenants five times more likely to experience financial hardship than homeowners.

A contributing factor to the challenges faced by renters in the UK is the surge in short-term lets, popularised by platforms such as Airbnb. While these platforms seem attractive and convenient to tourists, they have proven themselves to come at the expense of locals. With research showing that locations with a high concentration of Airbnb listings tend to experience an increase in weekly rental prices per-bedroom, affordable housing has become increasingly sparse in these areas.


Residents in tourist-heavy locations, like Devon, have voiced their concerns of being priced out of the property market by affluent families seeking to acquire additional holiday homes along the coast.

The recent surge in Airbnb rentals and holiday homes have been a catalyst of these worries, as evidenced by over 11,000 short-term lets situated in the region recorded in December 2022 alone.

The impact of Airbnb has also been felt on a worldwide scale. The U.S. state of Hawai’i, a notable victim of short-term lets, has taken measures to protect locals from their effects on rent prices.

Despite the state’s economy heavily relying on the tourism industry, regulations were implemented in 2022, prohibiting short-term rentals under 90 days or three months in residential areas.

While they will still be permitted in resort areas and specific areas surrounding them, these regulations are intended to protect local communities from the impact of short-term rentals, and combat the phenomenon of ‘overtourism’ by increasing the supply of long-term rentals.

The Renter’s Reform Bill

Following in the footsteps of Hawai’i, the UK Department for Levelling Up, Housing and Communities have outlined a new bill requiring landlords to be granted planning permission to rent out a property for more than 90 nights.

As Levelling Up Secretary, Michael Gove stated, “short-term lets can be helpful for the tourist economy, but we are now giving councils the tools to bring them under control so that local people can rent those homes as well.”

While this bill intends to ease the strains faced by renters in the UK, this bill has received it’s fair share of criticism. York’s Labour MP, Rachael Maskell, has been a vocal advocate for the regulation of short-term letting, addressing this issue years prior to the bill that was only just proposed this month.

In December 2022, Maskell brought this issue to the House of Commons, calling for regulation of the short-term lets that have left ”villages hollowed out by holiday let investors and second home-owners, and urban streets that are now party streets.” She identified Airbnb‘s unregulated nature as the cause of the high property and rent prices that have priced young people out of York. According to Maskell, the new reforms to short-term letting have been insufficient, only implemented after the damage has already been done.

With one in ten of properties in York’s city centre registered as holiday-lets, she highlights that “the proposals will do little to address the housing crisis in places like York where over 2,000 properties are short-term holiday-lets, when we’ve got hundreds and hundreds of families on our housing waiting list and local workers increasingly finding themselves priced out of the city.”

The Growing Concern for Future Generations

The dearth of affordable housing is heavily affecting the choices of Gen Z and millennials – approximately 620,000 more young adults are now living with their parents than a decade ago. The sky-high pricing of rent has left many youths to conclude that flying the nest is just not worth it anymore.

While short-term lets themselves are not the sole cause of the housing crisis, younger generations are faced with a landscape where “career-long positions have become ever scarcer, unemployment spells are longer, and earnings inequality has increased“. With economic conditions already displacing younger generations from the housing market, the hollowing of communities is increasingly leaving future generations without hope of ever being able to afford their own home.



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