11 things you really need to know about Airbnb in 2021

More overseas property owners are using Airbnb and similar online services alongside traditional agencies to generate vital rental income on their properties.

Since its launch to the property market, Airbnb has had a big influence not only on rentals and house prices, but also on property owners. Boutique hotels and traditional bed and breakfasts are also using Airbnb to increase the visibility of their space and welcome more guests.

After 13 years functioning in the property sector, there are many things that Airbnb has influenced.

So, if you are thinking of subletting your property or if you are planning to utilise Airbnb services for your vacation, here are the 10 things you should know about Airbnb in 2021.

1. Airbnb helped property owners

Airbnb, which was established in 2008, has helped those looking to move abroad by making it easier to find accommodation and sample life in other countries. Short-term lets have taken off since the advent of Airbnb’s convenient online booking. It has since been joined by companies such as VRBO, Tripping.com and other specialist online service providers, offering income for property owners around the world and fresh options for travellers.

For expats, spending some time and owning real estate in different countries, it’s an ideal option to maximise income, offset expenses and still keep using their home when they want to.

2. Airbnb trends and numbers

Airbnb has over 7 million properties around the world

Since Airbnb was first founded as Airbedandbreakfast.com, it now offers more than seven million homes in over 220 countries. There are over 150 million users on Airbnb and over 2 million people staying in an Airbnb per night.

Airbnb’s valuation declined 46% during COVID-19

Prior to the coronavirus pandemic, Airbnb was valued at USD 35 billion and reduced to USD 18 billion as global lockdowns began to be introduced.

3. Airbnb statistics and facts in the UK

Two in three UK hosts are women

Hosts on Airbnb range from students to retirees, however the average age of a host in the UK is 43, with women hosting more than men (62% to 38%).

Living ‘like a local’ (UK)

Looking at the guest profile, 74% use Airbnb to visit the UK for holiday or leisure and 79% choose Airbnb so they can “live like a local”.

Three in four UK guests from Europe (UK)

Indeed, domestic travel is a growing trend on Airbnb, and the ‘staycation’ is increasingly popular. While 76% of guests using Airbnb to travel in the UK are from Europe, 53% of guests start their trip in the UK. There are 6% from Germany and 4% from France, 13% are from North America, 5% from Asia, 4% from Australia and 1% from Latin America and Africa and the Middle East.

Income in the United States is around five times higher, with hosts in 2019 earning an average monthly income of USD 924, data from low-interest lender, Earnest, has found.

UK landlord numbers falling (UK)

Following a series of legislative changes and tax rises on buy-to-let property in Britain, the proportion of homes let by overseas landlords has more than halved from 13% in 2010 to a record low of 6% in the first half of 2018. During early 2020, HMRC also found that Airbnb owed an additional GBP 1.8m in corporate tax, on top of the GBP 1.1m it had paid. As a result, all UK Airbnb hosts were urged to come forward and reassess what they owed.

London bucks the trend (UK)

However, the number of homes in London owned by a foreign landlord has bucked the trend and nearly doubled from 5% in the second half of 2017 to 12% in the first half of 2018, according to sector specialist Hamptons International. Furthermore, the number of Airbnb listings in London has quadrupled within the last four years, with over 80,770 properties.

The average cost of a new let in Greater London rose to GBP 1673 per month in March 2020, up from GBP 1613 in March 2019.

4. Airbnb abroad: top Airbnb destinations in other countries

What are the top markets by active listing on Airbnb?

 Here is an up-to-date ranking of the top markets by active listings:

• USA [8.4 million]
• France [5.2 million]
• Italy [2.4 million]
• UK [1.8 million]
• Spain [1.7 million]
• Canada [1.3 million]
• Germany [0.9 million]
• Australia [0.9 million]
• China [0.8 million]
• Greece [0.7 million]

What are the top 10 Airbnb destinations?

Here is a ranking of Inbound and outbound guests using Airbnb to host or for vacation

Inbound

• United States
• France
• Italy
• Spain
• UK
• Japan
• Canada
• Australia
• Germany
• Portugal

Outbound:

• United States
• France
• UK
• Germany
• Australia
• Canada
• China
• Spain
• Italy
• The Netherlands

5. Airbnb is not as divided as we think

Airbnb founders, Brian Chesky, Joe Gebbia and Nathan Blecharczyk, say: “Thinking back to those days in August 2008, people thought the idea of Airbnb was crazy. Strangers would never trust each other. We live in an era where there’s a lot of division online and in the world, but Airbnb is actually proving we’re not as divided as we think we are. It has taught us that we’re more similar than we are different. People are 99 percent the same and people are fundamentally good, statistically. Otherwise, this concept wouldn’t work.”

Airbnb provided free space for people in need

Airbnb now offers an Open Homes programme, where homeowners offer extra space for free to people in need of temporary housing.

The idea came from a host who wanted to offer her spare bedrooms to people displaced by Hurricane Sandy free of charge.

Since 2012, more than 25,000 people from 52 countries have helped thousands of displaced individuals, first responders and refugees seeking transitional shelter.

Airbnb provided free space for people in need

Airbnb now offers an Open Homes programme, where homeowners offer extra space for free to people in need of temporary housing.

The idea came from a host who wanted to offer her spare bedrooms to people displaced by Hurricane Sandy free of charge.

Since 2012, more than 11,000 people from 52 countries have helped thousands of displaced individuals, first responders and refugees seeking transitional shelter.

6. The impact of Airbnb on the property sector in the UK

The average earnings for UK Airbnb hosts are around GBP 3,100 from a typical 36 nights a year, according to data from airbnbcitizen.

A study assisted by Dr. Margarethe Theseira, found that Airbnb generated GBP 502 million to the UK economy in one year and supported 11,629 jobs.

Moreover, activity on Airbnb is spread across the UK, with residents from close to 2,500 villages, towns and cities and over 233,000 listings.

The report says, “Flexibility, affordability and local connections are becoming more and more important, and this is having a profound economic impact on the UK. Whether it’s to earn extra income, impart insider knowledge or simply meet new friends, people are increasingly recognising the benefits of sharing their home. With that comes a new income for households, increased spending in local communities and a more affordable way for visitors to travel in the UK.Travel on Airbnb has helped boost local tourism while encouraging exploration of familiar and lesser-known destinations across the UK.”

7. Extra Airbnb services to help overseas property owners

For overseas property owners looking to rent out their property, Airbnb offers several extra services to help them ensure the process is smooth both for themselves and their clients.

Using a property manager

While some hosts on Airbnb manage their listings, for additional convenience, some hosts choose to list their home via a property manager. This company/person will act as a host to the guests, handling communication and check-in, and ensuring that they are looked after throughout their stay.

Airbnb host guarantee

Airbnb helps homeowners by offering up to GBP 600,000 in the UK or a USD 1million host guarantee in the United States and Canada over accidental damage and provides host protection insurance against liability claims.

Special mortgage for hosts

In the United States, there is even a special mortgage available to Airbnb hosts via Government-backed mortgage group Fannie Mae that allows Airbnb hosts to use their rental income as part of a lender’s approval, increasing their borrowing capacity.

Legal and financial advice

If property owners are thinking of short-term rental through Airbnb, another platform or agency, check out the local regulations and legislations and talk to an independent legal and financial advisor about the obligations and implications.

8. Airbnb legislation and requirements

It’s easy to see the rise in popularity in property rentals and think that it is quick and easy to generate revenue from short-term rentals, but it may not be as simple as it seems.

Many destinations around the world are cracking down on vacation rentals, particularly those on short-term platforms like Airbnb, and are strengthening local legislation and requirements.

Madrid restrictions

For instance in Spain, Madrid has introduced new rules to restrict the number of homes that can be legally rented, which is predicted to decimate the short-term rental market. The rules, aimed at “preserving the residential use of buildings”, say apartment or home rentals must be restricted to 90 days or less a year.

Apartment buildings used for short-term rentals also have to have the same licence as hotels. Those in Madrid’s central district need a separate entrance for rental clients as opposed to permanent residents.

Other Spanish cities including Valencia, Barcelona, Malaga and Seville are either considered or have introduced similar legislation on short-term tourism rentals.

Cape Town

In Cape Town, South Africa, letting flats out in the city-centre is illegal without the proper approval processes in place, warns search agency, Coastal Property Group.

The Municipal Planning By-law (MPBL) regulates holiday accommodation within the city. City of Cape Town mayor committee member, Brett Herron says any short-term holiday letting from a flat or a block of flats – irrespective of the platform including Airbnb or similar – must ensure that this is compliant with Body Corporate rules. This includes making sure the property is appropriately zoned and must apply to the City for approval.

“Applications must be made to the City’s Development Management Department. Any property owner wishing to make an application is advised to approach one of the City’s district planning offices or to access the Planning Portal on the City of Cape Town website where the requirements can be obtained,” he says.

Consult a specialist

Short-term letting or transient accommodation is a complicated matter and potential applicants should request a pre-application consultation session with a land use planner, he advises.

General residential zoned properties and single residential zoned properties do not have the same restrictions.

“Most general residential zoned properties in the city have only a dwelling house (a house used as a residence rather than for business) and in some cases a second dwelling. The City’s Development Management Scheme permits B&Bs to be run from such dwellings without any permission subject to compliance with conditions as specified in the scheme.”

Owners of general residential zoned properties can also run a guest house from a dwelling or second dwelling which seems to be a popular approach.

A guest house would, however, require the approval of the city if the property is zoned for single residential purposes. Bed-and-breakfast and guesthouses can only operate from a dwelling house or second dwelling and not from a block of flats.

Developer buy-to-let services

Some developers around the world will offer clients legal and financial services themselves to buy-to-let/build-to-rent property owners, either in-house, or through an associate. Again, it is worth checking the credentials of the providers to ensure they are professional, reputable and have a reliable track record.

9. Airbnb considerations for property owners

Financial expert

Vacation homeowners considering both long and short-term rentals should also take professional advice from a financial expert. This includes working out whether short-term or long-term rental options will bring the best returns and least risk.

Tax obligations

Property owners will also need to factor in their tax obligations as well as any legitimate expense claims they can make to legally offset their bill. Again, foreign owners should select someone with knowledge of the obligations in the locality where they own property and where they live.

Currency cunning

It is also important for foreign property owners to ensure they maximise their income by protecting their international payments and finding good money transfer rates, says David Johnson, founding director of foreign exchange specialist, Halo Financial. “The right guidance can help you save thousands of pounds on your currency transaction, which can make all the difference when buying a rental property abroad. You can also save on rental income exchanges and other ongoing foreign currency needs.”

10. UK overseas investors declining… but overseas investors in UK increase

Aneisha Beveridge, Analyst at Hamptons International, says, “The proportion of homes let by an overseas based investor has halved in the last eight years. Higher stamp duty and annual tax on enveloped dwellings combined with a steady increase in foreign investors’ tax bills has led to a decline in foreign investment in buy-to-let. Overseas investors also saw the removal of capital gains tax exemptions in 2015.

“However, London has bucked the trend with a pickup in international landlords. Sterling’s depreciation, effectively offering international buyers a discount, combined with a softening London market, has helped offset the additional higher costs of owning a buy-to-let property in the capital for foreign investors. 

11. Airbnb sparked the home-exchange idea

Rather than renting a house, some budget-conscious holidaymakers and travellers are turning to home exchange as cost-effective alternative for low-cost holidays, or the opportunity for those looking to explore emigration options in new countries is home exchanges.

 But hosts are always looking for a way of making the booking process easier, safer and more transparent for both hosts and guests and sector specialist, HomeExchange, claims to do just that. Founded in 1992, HomeExchange is a peer-to-peer home exchange company, with 450,000 homes in 187 countries.

For USD 150 per year, Home Exchange provides additional identity verification, unlimited exchanges, 24/7-member support, property damage cover and cancellation assistance.

You can also keep up with the latest news on property abroad and how it affects the currency markets in our informative news section.

Going on vacation with Airbnb? Here is how we can help

Halo Financial offers a number of free money transfer tools and services on offer for single transactions as well as regular currency exchange requirements. Clients work with a dedicated currency specialist to build a strategy of tailored currency tools that allow them to budget effectively, protect themselves from the risk of currency losses, and find opportunities to make the most of their money. They allow clients to buy or sell when the rate suits, protect against adverse currency movements and run automated orders to ensure they make the most of rate increases.

If you are utilising Airbnb services for your travel abroad, make sure you get the best value for your money! Fill in the form below to get a personalised quote or contact our currency experts to make sure you get a convenient exchange rate for your currency conversion