EY report finds Airbnb has little to no significant impact on UK housing

A new study by EY released today has found that Airbnb has little to no significant impact on the price and availability of housing in the UK – and that over 95 percent of house price increases can be attributed to factors unrelated to short-term rentals, such as increases in income and inflation. 

It is widely acknowledged that the UK has failed to build enough homes to keep pace with demand pressures for years, with independent estimates finding that the UK has a shortfall in housing supply of around 5 million homes. Meanwhile, Airbnb data has found that  the majority of hosts in the UK list one space and 40% say that the extra income helps them to afford their home. 

The UK study, which was commissioned by Airbnb, is the first of its kind to analyse the economic footprint of travel on Airbnb, as well as reviewing its impact on housing affordability at national, regional, and local levels. The report was based on a quantitative assessment of Airbnb data alongside information collected from publicly available sources.

Here is a summary of the report findings: 

Airbnb guests delivered significant economic benefits for communities across the UK:

• Travel on Airbnb generated £5.7 billion of gross value added (GVA)* and supported over 75,000 jobs in the UK in 2023. 
• This is the equivalent to £200 per year (£17 per month) per UK household.. 
• London had the highest GVA impact at £1.5 billion, followed by the South West (£855 million), Scotland (£774 million), and Wales (£354 million).

The share of properties listed full-time on Airbnb is too small to have any significant impact on housing supply:

• Entire homes listed on Airbnb account for less than 0.7% of total dwellings in the UK. 
• Data from Airbnb shows that the average Airbnb host rents their home for less than 3 days per month, indicating that the majority of hosts live in the homes they list on the platform.  
• Entire home listings on Airbnb that are hosted for 90 nights or more per year account for just 0.17% of the housing stock.

Across the vast majority of areas studied, there is no relationship between the growth in listings on Airbnb and the increase in housing costs:

• Around 95% of the change in rents and house prices from 2015 – 2022 is due to other factors unrelated to the growth of short-term lets. Where there is a correlation between Airbnb availability and housing costs, this minor impact is driven by a small number of geographic areas, while the vast majority of regions show no relationship.
• GVA impact outweighs any impacts on housing in every country, region, and local authority, including those where there is a relationship between Airbnb availability** and housing affordability, with most of the UK showing no correlation between the rise in active Airbnb listings and affordability.

The economic benefits of Airbnb-linked travel in the UK exceed the impact on housing costs:

• The economic benefits exceed the impact on housing costs in every nation, every region, and every local authority considered in this report. 
• The economic benefit of Airbnb-linked travel (equivalent to £17/month per household) is double any possible impact on housing affordability (£8/month per household) that could be related to the growth of listings on Airbnb.
• The modelling suggests that growth in Airbnb is associated with an improvement in rental and house price affordability in York and an improvement in rental affordability in Wales. This could be potentially due to Airbnb boosting local incomes and enabling more efficient use of the housing stock.

“UK house building has struggled to keep pace with demand over many years, and we welcome the government’s plans to build 1.5 million new homes. While only a tiny fraction of British homes are listed on Airbnb – typically for just a few days a month – this activity is generating billions for the UK economy and supporting tens of thousands of jobs, while Airbnb data shows it helps four in ten hosts afford their homes.” 

Amanda Cupples, General Manager for Airbnb in Northern Europe

Rules to support communities

According to today’s report, in the majority of local authorities, no correlation was found between the increase in active Airbnb listings and affordability, with entire homes listed on Airbnb accounting for less than 0.5% of total dwellings. There are only 25 out of 318 local authorities where more than 2% of total dwellings are listed on Airbnb. 

While the report highlights that any potential impacts are limited to specific areas and are outweighed by benefits to local economies, we want to help ensure that communities are equipped to regulate short-term rentals, should they wish. 

Airbnb has long led calls for England to implement new rules for short-term lets – including a register of hosts. Today, we have written to a number of MPs who have a keen interest in seeing regulations introduced, to express our continued support for the new government implementing rules for short-term lets, following a national consultation on the matter last year.

“We welcome regulations and we have consistently led in calling for national legislation for short-term lets to help make communities stronger. We want to make it easy for local authorities to track the positive impacts of home sharing, and for additional targeted measures to be introduced to support the sustainable growth of short-term letting activity, where needed.”

Amanda Cupples

“Our report provides a quantitative assessment of the impact of Airbnb-linked travel on both the UK housing market and the wider economy. This report is unique in bringing together the economic footprint of travel on Airbnb, as well as an analysis of its impact on housing affordability at a national, regional, and local level.”

EY spokesperson

View and download the full report Travel on Airbnb: housing and economic impact study here.

ENDS

*Gross Value Added (GVA) represents the value of goods and services produced in an area, industry, or sector of an economy.

**Defined as active listings on Airbnb.