A growing number of British homeowners are renting out spare bedrooms on a nightly basis to help cover mortgage repayments and other running costs, data from global homestay website Crashpadder.com shows.
“Although the 2012 Olympics is seeing booming demand for accommodation in London, and the Edinburgh Festival generates huge turnover when a million people arrive in August, there is a general trend of rising bookings as more people need to turn unused space in towns and cities into occasional income,” says Stephen Rapoport, founder and chief executive of Crashpadder.com.
The service claims to list 7,000 host properties in 103 countries. About half that total is in Britain, with the most in-demand properties in London.
One of the most popular is in a flat on Shaftesbury Avenue in the heart of London’s West End: the double bedroom is invariably snapped up by theatre-goers at £65 per night.
Another popular bedroom is in a penthouse in Old Compton Street, where lucky visitors can wake up to spectacular views across Soho.
Rapoport says: “The revenue which our bookings generate in January could be up by around 100% on bookings for November.
“Some hosts accept visitors for as much as 25 nights per month, but most do not really want people staying all the time, or even for most nights of a week.
“Our best-earning hosts take well over £1,000 per month from nightly lettings. Others settle for £100 to £150 from guests staying a long weekend.
“This demand which we have tapped into - from hosts and guests alike - is probably one of the few good news stories to come out of recession and global financial meltdown.
“The cheering fact is that more than 99% of people are decent hosts and reasonable guests. We have very few instances where either guests or hosts say the arrangement hasn’t worked out as well as hoped.”
Gradually, says Rapoport, Crashpadder.com is losing the image that it is a service directed mainly at hard-up backpackers who can’t afford hotels. In fact, the average age of all its users is 36.
Some guests even get food during their stay, with eating arrangements largely at the discretion of the host.
Rapoport adds: “I let out the second bedroom in my flat near Clapham Common, and it doesn’t make much of a dent in the £50-a-night charge if somebody shares my food or wine.
“If I’m cooking, I offer them a plate of food - and some hosts do cooked breakfasts before guests leave in the morning.
“Some hosts have long-held ambitions to get into the bed and breakfast business, either as main or supplementary income, so this is a easy way of finding out if they like the routine.”
Rapoport, who has worked full-time on the venture with co-founder Dan Hill since early 2009, says the key to the success of Crashpadder.com is good security: as both hosts and would-be guests exchange emails through the company.
Any host’s details are only revealed to visitors when the guest has made a payment by credit or debit card. Crashpadder.com holds the payment from guests as soon as the booking is confirmed, so there is no risk of non-payment.
Hosts can also check the guest feedback from previous stays before accepting any client for a booking. Hosts can reject any potential booking, for any reason they like.
With such strong demand for accommodation in 2012, Rapoport expects to plenty of competition soon.
One operator, Vive Unique, for instance, claims to be a booking specialist for unique city home rentals and a one-stop shop for any visitors to the London Olympics.
It offers properties from £150 per night, with extras including airport collection, personal chefs, babysitters, laundry services and even food for the fridge.
:: Information: www.crashpadder.com; www.viveunique.com
Finding a room to rent ‘such a battle’
The intensity of the chase among tenants to find a ‘houseshare’ - one room in a property in the private rented sector occupied by several tenants - depends to a large extent on where they are looking, a new report reveals.
Flatsharing website easyroommate.co.uk claims an average of 3.4 tenants now compete for each rental room in UK, against 4.1 in June 2011.
The supply of rental rooms has risen 7% since 2011, as landlords tap into a growing sector.
Competition is fiercest in Cambridge, with 12 renters competing for each room and paying £455 per month.
It is followed by London (6.7, £540); York (6.4, £350); Brighton and Hove (6.1, £437) and Oxford (5.6, £425).
West Bromwich has the weakest demand for shared rental accommodation (0.5, £350); followed by Salford (0.8, £44); Telford (1.3, £344) and Walsall (1.4, £325).
The findings are based on easyroommate.co.uk’s analysis of more than 86,000 room rentals around the country, and 30,000 flat hunters’ profiles.
In December, the number of renters registering to find a room fell by 13% compared to June 2011.
Jonathan Moore, director of easyroommate.co.uk, says: “Tenants looking for houseshares breathed a sigh of relief as competition for accommodation eased late in the year.
“A combination of a seasonal drop-off in tenant demand and an encouraging increase in the number of rooms to rent coming on to the market helped to alleviate the pressure. Winter traditionally triggers a slowdown in rentals, but for tenants on the move, it’s a window of opportunity.
“While the number of homeowners renting out spare rooms is steadily climbing, many aren’t aware of how much they can earn.
“In top hotspots such as Cambridge, homeowners make an average £5,460 per year, with the first £4,250 tax-free - making a sizeable dent in mortgage repayments.”
Despite this improvement for prospective renters, there are 3% more tenants looking for rooms than in June 2010 as frustrated first-time buyers switch to cheaper accommodation. In June 2010, some 3.1 tenants competed for each room, against 3.4 currently.
Moore adds: “Competition dipped with the approach of Christmas and the new year, but it is set to remain strong in the long term.
“There are currently 17,000 fewer first-time buyers able to secure mortgages each month than before the credit crunch, so this continues to drive demand for cheaper rental accommodation.”
New homes output hits new low
Builders drastically slashed back the number of new homes they started in the final quarter of 2011, despite attempts by the coalition Government to help first-time homebuyers and stimulate the market, a new report shows.
Figures from the National Home-Building Council (NHBC) show the total number of new homes registered by builders remained static in 2011 compared with 2010. A registration is made at least 21 days before building starts.
The number of new homes registered by NHBC member firms in the UK totalled 115,020 for 2011, just below the 115,458 figure recorded in 2010.
In 2007, when house building was at a pre-recession high, this figure was almost double, with 200,700 registrations that year.
Following a relatively stable level of registrations through the first half of 2011, figures plunged in the final quarter of 2011, to 21,152 (against 27,262 in 2010).
NHBC chief executive Imtiaz Farookhi says: “While December is always a short month when registrations dip, the end of 2011 was particularly weak, with little sign of the cautious growth the industry experienced earlier in the year.
“Independent reports predict housing shortfalls over the coming years and a decline in the wider construction sector during 2012.
“There is general consensus that combined efforts of the building industry and lenders could have a positive effect on sentiment and volumes, but it is important not to underestimate the factors holding back new homes construction.
“Smaller builders, in particular, continue to find the current situation difficult and will require increased access to finance. Our figures show the number of small builders working in housebuilding is lower than any time in the last 20 years.
“The question for 2012 therefore will be whether the Government’s measures are enough to actually achieve volume growth or only serve to stabilise the market. Either way, it is vital that housing is high on the Government’s agenda this year.”
Compared with 2007, the sharpest falls in the level of housebuilding since 2007 have been seen in the North East, North West and Yorkshire and the Humber (5,630 registrations in 2011, against 14,000 in 2007).
By contrast, in London, there were just over 24,000 homes started in the final quarter of 2011 - an increase of 4,000 on the figure for 2007.
Scotland saw only 5,580 started at the end of 2011, against nearly 21,000 in 2007, while Wales recorded 3,280, against 8,760 in 2007.
In the South East, there were nearly 31,000 registrations in 2007, against 17,250 in 2011.
Of new homes registered in 2011, some 20% were detached houses, 1% were detached bungalows, 18% were semi-detached houses and 21% terraced houses. Around 39% were flats and maisonettes, a slight rise on 2010.
The acute shortage of new homes might be a factor in keeping selling prices up.
According to the website SmartNewHomes.com, the average price of a new home shrugged off eurozone uncertainty and rose from £222,620 in October to £224,298 in November - the second consecutive month of price rises to complete a 1.3% jump over three months.
During the past year, the average price of a new house rose in Scotland (by 5.1%); the North West (5.4%); the West Midlands (15.4%); Wales (1.5%); the North East (4.6%), Yorkshire and Humberside (6.8%); the East Midlands (2.3%) and south-east England (1.4%).
But it fell in Greater London (-11.1%); East Anglia (-6.3%) and the South West (-4.2%).
Building check can beat ‘cowboy’ builders
A new property inspection service intended to protect elderly and vulnerable homeowners from conmen who present them with large bills for repairs has been launched by the chartered surveyor e.surv.
It will provide an annual inspection, dubbed PropertyCare+, to check the fabric of buildings, and also give advice on household appliances such as boilers.
It will highlight repairs requiring early attention, point out potential problems in the future, and provide advice on routine maintenance, with guidelines to likely costs.
By identifying problems early, PropertyCare+ aims to ensure that homes do not deteriorate, minimising repair costs.
Richard Sexton, director of e.surv, says: “General wear and tear and changeable weather can turn into serious issues for your home - and your wallet.
“Owners who catch them in time can stop costs spiralling out of control. Our professional inspection provides a home condition report, with expert advice on solving problems and guidance on maintaining the house for the future.
“Many elderly owners don’t get into the attic as often as they once did, and may easily overlook problems. By setting out the likely costs of making repairs proactively, PropertyCare+ can help with budgeting - important for somebody on a fixed income.
“Hopefully this will help to stop people getting ripped off by unscrupulous tradesmen, too.”
:: Information: Details of PropertyCare+, costing from £199 for a two-bedroom home to £269 for five bedrooms, are available from e.surv on 0800 169 9661 and www.e.surv.co.uk