Declining occupancy rates are forcing short-term rental hosts and property managers in the UK to increase rates according to new data published by London estate agent Benham & Reeves.
Analysis of 10 holiday rental hotspots generally found an increasing number of active listings, lower occupancy rates, and higher daily rates. For example, the number of active listings in Manchester rose 29% – but this led to occupancy levels reducing by 11% to 51%. The average daily rate of £124.70 was 9% higher, however. London presented a similar picture, with 22% more listings, occupancy dropping 13%, and daily rates rising by 7% to an average of £190.20.
Due to strict licensing policies, the situation is markedly different in Edinburgh – the only Scottish location to be included in the research. The number of listings has decreased by 12% in Scotland's capital, where the occupancy rate is 73%, much higher than the other locations analysed in this report. This has led to revenue increasing by 17% and daily rates going up 18%, to an average of £187.70.
The data, which was provided by AirDNA, estimated the number of UK listings to be 528,700.
Marc von Grundherr, Director of Benham & Reeves, said many buy to let landlords had switched to short-term rentals in recent years.
He continued: “The data suggests the heat may be dying down with respect to consumer demand, with occupancy rates falling significantly and denting annual revenues in the process. As a result, it seems as though short let providers have ramped up daily rates in order to compensate, but this is a tactic that is unlikely to resonate with consumers given the current economic landscape.”
Does the data reflect your experience this year? Let us know in the comments.
Location | Active listings | Active listings annual change | Occupancy rate | Occupancy rate annual change | Revenue per year | Revenue per year annual change | Average daily rate | Average daily rate annual change |
Manchester | 5,505 | 29% | 51% | -11% | £19,000 | -3% | £124.70 | 9% |
London | 52,492 | 22% | 61% | -13% | £33,300 | -4% | £190.20 | 7% |
Peak District | 5,368 | 18% | 62% | -8% | £36,700 | 7% | £186.70 | 13% |
Lake District | 10,461 | 15% | 66% | -12% | £42,400 | 12% | £203.10 | 16% |
Cotswolds | 5,701 | 10% | 58% | -14% | £39,500 | 1% | £218.00 | 9% |
Somerset | 5,097 | 6% | 57% | -13% | £31,200 | 2% | £178.80 | 13% |
Devon | 14,847 | 6% | 57% | -16% | £34,100 | -7% | £200.40 | 9% |
Dorset | 9,526 | 6% | 58% | -14% | £34,400 | 0% | £196.10 | 8% |
Cornwall | 18,623 | 5% | 60% | -13% | £33,000 | -4% | £187.40 | 10% |
Edinburgh | 5,379 | -12% | 73% | -1% | £40,100 | 17% | £187.70 | 18% |
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