The Cost of London’s Airbnb Boom

How short-term lets are reshaping neighbourhoods, affecting quality of life, and how we can turn the tide.

Jun 14, 2025

As you move into your new flat in Brixton, you might be looking forward to saying hello to your neighbours and settling into the rhythm of local life. But as you unpack your boxes, find your local coffee shop, and try to memorise the route to the tube station, you have a dawning realisation: your neighbour has changed already. Last week it was that nice Belgian couple who waved at you as they were walking down the street. But this week? You’ve got a group of Spanish university students, pounding out reggaeton until ungodly hours in the morning.

Welcome to the “Airbnbification” of London, where your neighbourhood has quietly become a hotel district.

The Scale of the Problem

Central London Forward is a collective of 12 inner-London boroughs, who have recently published a report into short-term lets in London. According to their research, 117 000 homes were listed for short-let across London last year. Around 84 000 of these were whole properties. That’s the equivalent of 1 in 32 homes being used as short-term rentals.

The number of short-term rentals are concentrated in central boroughs, accounting for 67% of short lets. Westminster is by far the most prolific, with over 16 000 short-term rental properties in the borough. That’s enough to make up 40% of all private sector rentals (PSR) in the borough - a staggering statistic. Lambeth has the seventh highest number of short-term rentals in London, according to the research, with 5599 properties being let out on a short-term basis. That’s the equivalent of around 13% of the total rented housing stock.

Jae Vail from the London Renters Union puts it bluntly: "While landlords get rich from this lucrative market, ordinary Londoners are forced to pay extortionate rents". It's a system where profit trumps people, where the needs of weekend visitors are prioritised over those who call London home.

This comes at a time when we are also seeing a significant reduction of homeowners with a mortgage in the capital, as shown by the figure below. This has gradually put more demand-side pressure on London’s rental market as more people rely on rented accommodation to live. Coupled with the rise of short-term lets in central London, it’s easy to see why many locals are being forced to move away from their local area.

Money Talks

The financial incentives driving London's short-term let boom are enormous. In Westminster alone, income from short-term lets is estimated to be £450 million a year, which is equivalent to almost 18% of the total private rental income in the borough. Across central London, income from short lets equals 8% of total private rental sector income.

According to AirROI data for 2025, the average monthly revenue for an Airbnb property is £2753, with a daily rate of £185 and an occupancy rate of around 48%. However, that doesn’t tell the full story. Central London properties are far more lucrative than this - as shown when delving into individual properties. In Brixton, we looked at the situation. We found one three-bed property next to Brockwell Park, on Chaucer Road, that was earning £49,542 for an occupancy rate of just 45%.

When looking at who owns these properties, it tells an interesting story too. According to data from Inside Airbnb, 52.7% of hosts have multiple listings on Airbnb. At the extreme end, Blueground, a luxury flexible accommodation business, has an eye-watering 458 listings across the capital. The graph below shows that 24% of properties are owned by hosts with more than 21 properties.

The Community Cost

Beyond the numbers lies a more troubling reality: the gradual hollowing out of London's residential communities. The report ‘Airbnb and its potential impact on the London housing market’ found that more than 2% of all properties in London, and up to 7% in some local areas, are being misused through Airbnb as short-term holiday rentals. To add to this, the recent report by Central London Forward has found that over half of short-term rental homes are being rented out for over 90 days, contravening Section 44 of the Deregulation Act which allows Londoners to rent out homes for up to 90 cumulative days without planning permission.

The impact on community life is profound. As one Westminster resident told researchers studying Airbnb's effects: "you don't know how to say hello to people anymore, that takes away your community and your sense of autonomy about where you live so you don't have a sense that you belong in the same way". When your neighbours change every weekend, the social fabric that makes a place feel like home begins to unravel.

This isn't just about inconvenience. Studies show that transient visitors are not invested in shared practices, and issues with rubbish disposal, anti-social behaviour and housing security were frequently mentioned by residents. The constant turnover creates an exclusionary effect on local residents, who feel increasingly isolated and marginalised in their own neighbourhoods.

Looking for Solutions

The situation isn't hopeless, but it requires political will and practical action. Cities like New York have implemented strict regulations requiring hosts to be present during stays and limiting guests to two people - measures that effectively target commercial operators while protecting genuine home sharing. Barcelona has gone even further, with plans to completely ban companies like Airbnb from operating in the city from 2028.

Enforcing existing regulation also seems like a good idea. Central London Forward is calling for mandatory national data-sharing and registration for short-term lets, giving councils the tools they need to monitor compliance. They're also proposing possible changes to taxation to make short lets less attractive compared to long-term rentals, and new powers for boroughs to set up local licensing schemes in areas where housing affordability is under particular threat.

Mayor of London Sir Sadiq Khan has recently argued that councils should be able to go much further on charging people more council tax for second homes. This would potentially deter people from buying properties in the capital and letting them out on a short-term basis, however, may also create unintended consequences which need to be considered before being implemented.

What This Means for Your Neighbourhood

If you live in London, the chances are that short-term lets are already changing your area. The question is whether these changes enhance or undermine what makes your neighbourhood special. Some would argue that short-term rentals provide a much needed boost to the local economy, as tourists are more likely to spend money at cafes, shops, and restaurants. This provides jobs and a source of income for local people.

However, when entire buildings become unofficial hotels, when the corner shop loses its regular customers to a revolving door of tourists, when your street becomes a place people visit rather than live - something fundamental is lost.

The irony is that tourists come to London for its authenticity, its vibrant communities, its local character. But the very mechanism bringing them here risks destroying what they came to experience. As neighbourhoods lose their residential character, they become generic spaces optimised for short-term consumption rather than long-term community.

What can you do about it?

If you feel inspired by this article and want to take action in a meaningful way, here are some options to get you started.

Write to your MP - this is an incredibly powerful way of getting your voice heard in our democratic process. Local MPs are required to respond to any letters from local residents, and the more they hear about this issue, the likelier they are to take action. If you're in Brixton, that's Bell Ribeiro-Addy (Clapham and Brixton Hill).
Contact your local councillors - Lambeth Council has more direct power over planning and licensing than your MP. Email your ward councillors about implementing stricter enforcement of the 90-day rule and supporting calls for local licensing schemes.
Report illegal short-term lets - if you suspect a property in your area is operating beyond the 90-day limit, you can report it to Lambeth Council's planning enforcement team. Keep a record of constant turnover or commercial signage.
Join the London Renters Union - this is a union that campaigns for rent controls in London. They believe in the power of collective action to drive meaningful change and are actively campaigning on short-term let regulation.
Support local campaigns - organisations like Central London Forward are pushing for national registration schemes and better data sharing. Follow their work and amplify their research when it's published.
Engage with your building - if you live in a block with short-term lets, speak to your freeholder or property management company about lease clauses that could restrict commercial subletting.
Spread the word - sharing articles (like this one) about the problem can help spread awareness in the community about the rental crisis.

The Path Forward

This isn't about being anti-tourism or anti-technology. London benefits enormously from visitors, and platforms like Airbnb can provide genuine value when used responsibly. The challenge is ensuring that tourism enhances rather than replaces community life.

The solution lies in recognising that housing is more than a commodity, it's the foundation of community. When we prioritise short-term profits over long-term residents, we risk creating a city that's financially successful but socially hollow.

As Centre for London chief executive Antonia Jennings concluded: "We urgently need ambitious solutions. The government must get behind London's leaders and invest in the capital to finally turn the corner on the housing crisis". But alongside building more homes, we need to protect the ones we have for the people who make London their home.

The Airbnb boom has shown us that technology can reshape cities faster than policy can respond. Now it's time to ensure that reshaping serves communities, not just profit margins. Because the true measure of a city's success isn't how many tourists it attracts, but how well it supports the people who call it home.