EP131: Airbnb Regulations in London Explained

EP131: Airbnb Regulations in London Explained


This week, Jasper is chatting with Marc Figueras, the CEO and Co-founder of KeyNest, a smart key exchange service with a network of locations across London where Airbnb hosts and property managers can securely store their keys.

Marc explains the specifics of the regulations particular to London as well as the options available to Airbnb hosts in the face of these newly enforced restrictions. Find out more about how Airbnb’s image has affected the rules and what you can do to stay on the right side of the law!

Topics Covered

How Parliament changed the rules in January 2015

  • Allowed for short-term lets without planning permission
  • Limited to 90 nights per calendar year

Airbnb’s self-enforcement

  • The rules haven’t been enforced because it was up to local councils
  • Hotel lobbies have pressed the new mayor
  • Airbnb agreed to self-enforce, but only for those hosts who are renting out an entire home
  • When the restrictions go live this spring, the Airbnb site will no longer allow bookings after the counter on a listing hits the 90-day limit

The legal options for Airbnb hosts

  • Sell and move to a different market
  • Initiate the long and costly process of changing your permission from residential to commercial
  • Host for fewer than 90 days
  • Pursue long-term lets of 91-plus days

The danger of circumventing the rules

  • Though listing on different platforms is an option, it is still illegal
  • Listing an entire house as a private room or creating new Airbnb accounts may result in having your account banned
  • Hosts are dependent on the platform for customers, so damaging that relationship is unwise

How Airbnb’s image can be restored

  • Return to the original model of private residents using the platform to make extra income and meet new people
  • The community itself must be vocal about the positive aspects of the service

The KeyNest service

  • Network of cafes and convenience stores for secure key drop-off
  • 35 London locations
  • £5.95/key collection or £14.95/month

Connect with Marc

keynest.co.uk

Connect with Jasper

Email: [email protected]

Twitter: @GetPaidForUrPad

Instagram: @GetPaidForYourPad 

Facebook: www.facebook.com/getpaidforyourpad

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Complete Transcript for Get Paid for Your Pad Episode 131

Jasper:

This episode is brought to you by Hostfully, a company that helps you make beautiful guidebooks for your listing. Make your own at hostfully.com/pad, and a special for Get Paid For Your Pad listeners, you’ll get a free guidebook consultation after you make your guidebook.

Welcome to another episode of Get Paid For Your Pad, and today we are going to talk about the regulations, the rules and regulations in London. London has recently imposed regulation that hosts are only allowed to rent out entire places for 90 days, just like in Amsterdam. The regulation’s fairly similar, but it’s 90 days versus, in Amsterdam, it’s 60 days.

But, we’re going to get all into the details with Marc Figueras, who is the CEO and cofounder of KeyNest, which is a smart key exchange service, and he’s based in London, so he knows all about the London market and what’s going on there.

So, Marc, welcome to the show.

Marc:

Thanks, Jasper. It’s a pleasure to be here.

Jasper:

How’s London? How’s the weather there? Is it as cold as in Amsterdam?

Marc:

It’s freezing. We’re getting snow today.

Jasper:

You’re getting snow? That’s quite rare in London, no? Is it?

Marc:

Yes.

Jasper:

Great. Well, it’s just below freezing here in Amsterdam. I don’t have many winter clothes because I normally reside in warmer countries, but because I’m selling my house, I’m doing some refurbishment on my house at the moment, so I had to come back and sort of coordinate that. So, it’s not a big pleasure for me to go outside, but I’ll deal with that.

But, let’s talk about London. So, can you explain, what exactly are the regulations that are enforced by the councils and by the city for these, and also, how Airbnb enforces these rules?

Marc:

Of course. I think it’s helpful to start looking back a little bit, a few years. So, before 2015, doing Airbnb without a license was actually illegal. A license was needed, and essentially what that means is a change of use of the property from the planning council from residential to commercial use, just like a hotel or a B&B, or bed-and-breakfast.

In 2015, the Parliament voted to change that and to allow people to host in their houses or in their properties for a maximum of 90 days per year. That’s per calendar year, from January to December. So, that regulation’s been in place since January 2015, and it hasn’t really been applied because it’s up to the councils to enforce it. In London, there are about 40 local councils, each one has their own neighborhood, and they’re the ones responsible for enforcing this limit.

Now, until now, nobody has enforced it. It’s only recently that the hotel lobbies have been pressuring the new mayor to kind of reduce the power of Airbnb. In a way, they have been successful. Airbnb has yielded to those demands, and they’ve now agreed to self-enforce those regulations on their hosts, but only partially. So, if you are an Airbnb host in London, you will only be limited if you have an entire house or an entire property that you’re renting out. If you have a private room, you’re not affected by the Airbnb limits, although you are affected by the regulation. So, in theory, the council could crack down on everyone, but so far, Airbnb has decided to impose the limits only on entire homes.

Jasper:

Right. So, you’re saying that it’s not legal to rent out a private room for more than 90 days, as well?

Marc:

That’s right. That’s what the regulation says.

Jasper:

Okay, right, but Airbnb’s not enforcing it and the councils aren’t doing anything, so in practice, if you were renting out a private room, you can pretty much do the whole year round and you shouldn’t have any problems.

Marc:

Not from Airbnb, no, you’re not going to have any problems. Now, it’s actually, Airbnb has made this decision, which is quite smart, right, because it’s very rare that a council would complain if you rent out a private room for a few days or for the whole year a few days at a time because, anyway, that’s your house and you live in it. It’s quite difficult to monitor that, and it doesn’t really cause the council any issues either. It’s very unlikely that your house will get robbed or trashed, or a party will be made if you’re in the room next door, so from a council perspective, really, the problematic ones are the entire homes anyway, so I think Airbnb’s been smart to selectively apply the regulation.

Jasper:

Right. So, it’s 90 days for entire homes. Now, I believe that, in Amsterdam, if you rent out less than 40%, then you’re not getting enforced by Airbnb. Is that the same in London? So, for example, if you have a two-story apartment, then you could rent out the bottom floor and live in the top floor, for example. Is that the same in London?

Marc:

So, in London, the regulation doesn’t differentiate between the two, which means that Airbnb’s the only agent making that decision, and I believe how they’ve done it at the moment is that if you tick the box ‘entire home’, then you have to comply to the 90 days, and if you tick the box ‘private room’ instead, then you don’t have to comply with that 90 days.

Jasper:

Right. So, technically, you could rent out an entire apartment, but just list it as a private room, I guess.

Marc:

Yes, you can, and some people do that. That’s definitely a possibility. I mean, there are creative ways around the Airbnb limits. I wouldn’t encourage them, but obviously, you know, Airbnb is an open platform and if you wanted to circumvent the rules, you could also create new listings, right. But, on the whole, I think the effect for Airbnb is still quite significant because they are limiting the capacity for existing multi-property entire-home hosts to let and to rely on Airbnb on a long-term basis.

Jasper:

And is this regulation actually implemented on the Airbnb platform already? Because in Amsterdam, I can see a counter on my listing, so right now it’s showing that I’ve rented out like 48 nights or something and I have 12 nights left, but I don’t think anything actually happens when you go over that 60-day limit. I think the counter, for now, is just showing you the amount of nights that you have left, but I think it’s going to start in the summer, when they’re actually going to block your calendar. Is that the same in London?

Marc:

That’s right, yeah, almost the same here. So, you have your counter ready, you’ve got an entire home, you’ll be able to see how many days you’ve got booked, you can go over the limit. We have some clients that have already gone above the limit, so they already have bookings for more than 90 nights, and Airbnb’s allowing them. Airbnb has also agreed to honor those bookings, so they will not cancel them after they put in the limits.

I think the expected go-live date for the limit in London is spring. We don’t have a specific date. But, from that moment on, it’s expected that Airbnb will actually not allow you to take any more bookings after 90 days.

Jasper:

Right. So, let’s talk about the options that current hosts have with this new regulation. I’ve been getting a number of emails from people in London asking for advice on what their options are.

So, let’s start with the first option, and this is the option that I chose, which is to sell your house or apartment and buy something somewhere else in a location where you don’t have these regulations. So, I recently just bought a penthouse in Columbia where I can rent out, even though Airbnb’s not allowed, or a short-term rental under 30 days is not allowed there, but the company that I bought the property off, they have a license, so they are allowed to rent it out for me. So, that’s option one, you just move.

Now, I understand that most people are probably not in the situation where they’re ready to just sell their house and buy something else on the other side of the planet. What are the other options?

Marc:

I think the first option, really, is just to ask your council for permission to change the use from residential to commercial so you can have, so to speak, a license for doing Airbnb. It’s not a very popular option because the councils are very slow to respond to those requests, and actually, a lot of our clients, they’re scared that by submitting a request, they’re basically telling the council that they’re doing Airbnb already, so they’re scared of then being put into the box where they would be targeted first if the council did decide to enforce the regulations themselves. But, there are agencies that specialize in doing that, so it’s definitely a possibility that some people have explored, particularly companies that do Airbnb.

Jasper:

Do you actually know somebody who’s done that successfully?

Marc:

I don’t know of anyone who’s done it successfully. I know of the people who are in the process. I’m very happy to write it in the comments if I hear from them when they do so. I think it’s quite a long process anyway, so it probably takes at least three to six months to get a response, and it also involves a significant amount of money for the application. I think you’d probably need a barrister or a lawyer to advise on the best way to do that with your council.

And, it depends on the individual council, as well. There are some councils where it’s probably not even worth trying. Here in Camden for example, probably, don’t bother to try that. There are others that might be more open-minded to it. We’ve heard Southwark in south London, potentially, will be doing that, but that’s only rumors.

Jasper:

Right. So, it would be interesting to sort of keep track of the people that apply for this change of designation for their houses because then we know where it’s worth it to apply, because I can imagine my first gut feeling would say, “Well, you know, it’s going to cost a lot of money to apply, it’s going to take a long time, and then what’s the chance that the council’s going to agree to it? It’s much easier for them to not to agree to it.”

But, yeah, if you hear of any people who’ve successfully done it, if you do want to comment on the show notes, that would be very helpful.

Marc:

Yeah, I’d be happy to do that when I hear from them.

Jasper:

Awesome. What are some other options?

Marc:

You can list on a different platform. Obviously, that’s not going to make the regulation go away. The regulation isn’t imposed by Airbnb, it’s just enforced by Airbnb, and none of the other platforms are enforcing this regulation. So, you could switch to HomeAway or any of the other ones, and you technically wouldn’t be enforced by your listing agency, so you could get bookings from those. And if you’ve been doing Airbnb for quite a long time and you feel quite comfortable about your ability to take on people from different sources, then that’s a good option for you.

Jasper:

Right. So, you could list on multiple platforms, in which case, you are still doing something illegal, technically, but there’s not a big chance that you’ll get in trouble because it’s the council’s responsibility to do the enforcement and they have much bigger issues to deal with. Is that correct?

Marc:

Yes, absolutely correct. Airbnb is quite popular in London, there’s about 50,000 listings here, but London’s a huge city and, to be honest, councils have much, much more important issues to deal with. Even councils that are speaking up against Airbnb, they have many, many more important things to do. So, we’ve actually never heard of anybody ever being told off by their council.

Also, until now, Airbnb hasn’t released any data to the government either, so they have no way of finding out exactly and verifying whether you’ve done more than 90 days. They could find out if you are currently listed, but not over 90 days. So, at the moment, they don’t have a way of finding out. They also don’t have a rationale for doing it, unless you get a complaint from a neighbor or some sort of politically connected person, but that’s really kind of unlikely.

So, so far, we haven’t heard anything. It’s something that could change. So, I think that the public image of Airbnb is quite important here, and I think, together, the community of Airbnb hosts is aware of this and is trying to spread the word about what Airbnb really means because the media often focus on the bad stories, on the robberies, on the houses that get trashed, on the people that get scammed, because it’s a good headline, but actually, on the whole, Airbnb works very well in London and it’s probably going to continue that way. But, it’s important that we communicate about it.

Jasper:

Hosts, I can’t emphasize how important it is to share recommendations of things to do or eat near your listing beforehand. Your guests won’t have to go through TripAdvisor, Foursquare, or Yelp. They won’t have to scratch their head and think about possible places right in the moment. I’ve been using Hostfully to create an online and printable guidebook to show my guests my favorite coffee places in Amsterdam. They use my recommendations, and I’m getting fewer questions from my guests as a result. I’ve also included screenshots of my guidebook on my Airbnb listing as a way to differentiate my listing from others. So, make your own guidebook at hostfully.com/pad.

Right, so we have discussed three options so far. First of all, you can move to a different market. Secondly, you can just keep doing it on different platforms, and then you’re acting illegally, but the chance that you’re getting caught seems to be fairly small. And the third option, obviously, is to host for less than 90 days. Right? Those are kind of the three.

Marc:

Yes, less than 90 days. You can also host people for over 90 days at a time. So, if you’ve got bookings of more than a month and a half, those are not illegal in any case, so you can have as many of those as you want.

Jasper:

Right. So, what’s the cut-off, actually?

Marc:

Ninety days.

Jasper:

Oh, 90 days. So, you’re not allowed, technically, you’re not allowed to rent out… Like, for example, if you have two bookings and they’re each two months, is that allowed?

Marc:

Yes, you can have as many bookings of at least 91 days as you want.

Jasper:

Okay, 91. Okay, so 60, if you have two bookings of two months, then that’s not legal.

Marc:

Exactly.

Jasper:

Okay, right. Are there any other options available for people?

Marc:

You could try different Airbnb accounts, and sort of try and fight Airbnb that way. I’m not sure that this is a good idea. I personally wouldn’t.

Jasper:

Well, yeah. So, there’s basically the legal way of doing things, which is moving to a different market, or just doing it 90 days or less, and then there’s a whole bunch of gray area options where you’re doing something that’s not legally allowed, which is to use multiple platforms or to use some tricks, like you could list it as a private room and rent out your entire house anyway, or you could create multiple accounts. But then, I think the Airbnb accounts are per address, so then you will have to use different addresses, as well, I believe. So, in any case, I mean, that’s definitely an option that I wouldn’t recommend because then, you know, it’s just a matter of time until you get caught and you run into trouble.

So, I think if people want to use multiple platforms, you know, it’s something that’s not legally allowed, but at the same time, I’m kind of neutral. I mean, I’ve been doing it technically illegal myself in Amsterdam, but I wouldn’t necessarily recommend it. But, I mean, people have to make the choice if they want to do that or not, but definitely, trying to fool Airbnb is definitely an option that I strongly would not recommend because I think then you’re getting into a very slippery slope and you’re going to get caught pretty soon, and then you get your account banned and all that kind of stuff.

Marc:

Absolutely. I totally agree with you, and I think we have to remember that, as an Airbnb host, we’re very dependent on Airbnb to send us their customers, and if that relationship goes bad, then we will be forced to move. So, it’s important to also take care of our relationship with Airbnb as individual hosts.

Jasper:

Right, I agree, yeah.

You’ve talked about the image of Airbnb and you think it’s quite important that Airbnb has a good image, so can you talk a little bit about that?

Marc:

Of course. So, the regulation has been in place since 2015, and it was put in, the first place, because before that, it was illegal. So, it was a time where Airbnb was still fairly small, a good community of mostly home-sharers in their own homes, and that’s kind of changed over time. So, London now has over 100, 150, what we call, Airbnb management companies who’s basically managing other people’s houses, and those would be hosts with anything from five to a few hundred properties in London. And so, those are really the companies that Airbnb’s targeting in some ways, but in some ways, it’s also not going to be successful because these companies can just move to other channels like booking.com, HomeAway. In fact, many of them already are on different channels anyway.

Now, I hope this means that the Airbnb public image is going to recover because if it doesn’t, then the councils can potentially think about enforcing the regulation, and this could be quite bad for the community of actual home-sharers who have been hosting in their own houses, in their own homes for awhile, and not doing it as a business, but just doing it as a way to get some extra income on the side, or even as a fun way of meeting other people.

So, yeah, there’s been some work in London in the local Airbnb community to think about ways in which we can maybe have data or talk to our councils and show the good side of Airbnb and everything that Airbnb is helping to create in terms of local communities. So, there have been cafes that were created as a place for people to welcome their guests that didn’t exist before, and that’s helped strengthen the local community in London.

And, yeah, so I think that that work is very important in the long term because Airbnb, so far, has decided to enforce the regulation partially. Who knows, they could enforce it totally, even private rooms, even though it’s unlikely, but it’s a possibility. No one’s going to protect its image. The hotels are going to go against Airbnb for as long as they’re in business, and it’s only up to the community to do it because we are the ones that are best placed to show what Airbnb’s all about.

Jasper:

Absolutely. I totally agree with that.

We’re almost at the end of the episode. Do you want to explain a little bit about KeyNest, your company, and what service you offer to Airbnb hosts?

Marc:

Of course. So, KeyNest is a network of cafes and community stores where you can securely drop off your keys and have it collected by your guests. So, we attach a tracking fob to all the keys that are handed to us, so you can track your keys online, and the keys are only handed out to your guests if they provide the right code. Generally, the code’s online, so actually what this means is you can self-check in your guests and get notified when they collect the keys.

So, it’s a pretty handy service. We have, currently, 35 locations in London and we’ve just opened two in Reading. We also opened in Portsmouth and Leicester. We’ll be opening other sites soon in the UK, as well. So, yeah, if you are ever in trouble, don’t know how to exchange keys with your guests, that’s what we’re here for.

Jasper:

And that’s become a little bit more important since Airbnb has recently, they’ve made it mandatory for hosts who want to have the ‘travel business ready’ badge on their listing, because in order to have the badge, you now need to have a keyless entry system or you have to have a way for the guests to check in without the host being at the property.

Marc:

Absolutely, and you can put KeyNest as one of those options and that’s accepted by Airbnb.

Jasper:

Okay.

Marc:

I think the good thing is that it’s completely flexible in terms of, you can drop your keys whenever you want to, you can drop them two weeks in advance, we don’t charge for storage, and your guests can collect them at 6:00 in the morning if they want to, or at 2:00 a.m. if they want to, as well. So, it’s totally free for the business traveler, and that’s really important as many of them are working late in London, especially in central areas.

Jasper:

And how do people sign up? What do you guys charge?

Marc:

We charge, for an individual collection of your keys, we charge £5.95. The drop-off and the storage is always free. And if you want to use this recurrently, for £15 a month, you can pick up your keys as many times as you want. Even for your cleaners, your staff, or your guests, we’re there for you.

Jasper:

Okay, very cool. How did you come about this company? How did you come up with the idea?

Marc:

I’ve actually been a host for about two years now, and my previous job was in finance, and you can imagine, the hours of a finance job don’t go well with Airbnb hosting. I was never available to meet my guests, and I felt really sorry for them, always asking them to come late, or come to my office or something, so basically tried to solve my own problem. And, along the way, I realized so many other people had the same problem, so we built something that’s really secure, very easy to use, and so that we don’t want to be in people’s way. They can just go ahead and use it, and enjoy the free time.

Jasper:

Awesome. So, for those who are listening and those who are in London or Portsmouth, you said, and Leicester?

Marc:

Yup, and Reading, as well.

Jasper:

And Reading. If you’re interested, you can go to keynest.co.uk, and there you can find more information about this service.

All right, well, Mark, thank you very much for joining us today and explaining what the regulations are in London, and I wish you all the best with KeyNest.

Marc:

My pleasure. Thanks, Jasper.

Jasper:

No worries.

Marc:

I’m also available for questions if anybody wants to have a chat about their property. We’re right here to talk to hosts. You can just ring up the number on our website. We’re always happy to have a chat about your property and how you’re doing.

Jasper:

Awesome.

All right, well, thanks for listening, everybody. And, of course, next week, there will be another episode, two episodes actually, per week. Okay, see you next time.