A British entrepreneurial group is launching a new short term rental App in a bid to eradicate tenancy breaches through sub-letting. It is the first short term rental platform in Europe, aiming to benefit both landlords and tenants alike.
The London-based property management company, Lavanda, has teamed up with global asset manager Aberdeen Standard Investments and industry experts, JLL.
The App can be accessed by both tenants and landlords using a service log that lets them work together. Days of the year can be allocated during which a tenant can sub-let legally, with permission from their landlord. Landlords can take an agreed and legally-contracted percentage of income generated by sub-letting, and the tenant can legally reduce their outgoings by sub-letting, perhaps when they are away from home or low on funds.
Three trials are being carried out, two in London and one in Leicester, covering 470 different properties, to test the idea to see if it can reduce illegal sub-letting. There has been growing demand for solutions to short-term rental issues across the property industry. Illegal ‘Airbnb-ing’, a practice by which tenants lease their home for small periods of time without first obtaining permission from their landlord, has become a rising issue, and one that Lavanda hopes to eradicate.
Founder, Guy Westlake, said he would like to use the idea more broadly across the UK and Europe. “Short-term rentals are shaping the future of residential property but to date they have been happening under the radar, causing unnecessary risks for both residents and landlord,” he said.
Aberdeen Standard Investments takes care of £44 billion of real estate assets in the UK, Europe and Asia, and JLL lets and manages over 5,000 residential units in Britain, giving enormous opportunity for Lavanda to grow. Working together, the companies have plans to allow tenants to access a legal source of income while giving the landlord a healthy yield, too.
It may sound like a win-win situation, but should tenants earn money on a property they don’t actually own themselves? Perhaps it is more a case of reducing the illegal side of sub-letting which, in some cases, can lead to people to live in squalid and over-crowded conditions.
In 2015, in one of the most extreme examples of illegal overcrowding seen in the last decade, it was discovered that 25 adults and a child were living in an East London property that was originally licensed to house a family of up to seven people. The Grenfell Tower tragedy highlighted the problem of illegal sub-letting, when authorities had no idea how many people lived in the building, or even who they were. Further difficulties arose as people claiming to have lived in the building fraudulently received large sums of funding meant to support the victims and their families.
If you are thinking of investing in a buy to let property, make sure you ask an Independent Chartered Surveyor to report on any faults or issues with the property before purchase.