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Transparent: London revealed as Europe’s largest vacation rental market

UK: With almost 68,000 vacation rental properties, London leads the European market by nearly 20,000 units and is home to over 100,000 bedrooms, according to a Transparent survey.

As a mature short-term rental market, the UK capital hosts around 38,000 one bed properties, with two bed accommodations accounting for 25 per cent of its total supply.

Supply breakdown by number of bedrooms in London

Of this supply, 55 per cent is managed by professional property managers – a number which has grown by three per cent over the past year.

Honing in more closely, the top three areas of London that collectively make up 36 per cent of the city’s supply are Westminster, Tower Hamlets, and Kensington and Chelsea.

Tower Hamlets, which constitutes 11 per cent of London’s total short-term rental supply and 12 per cent of total reservations by borough, is not ranked highly in ADR. This is due to a higher percentage of private room listings relative to entire home listings.

Average daily rate of London boroughs

Turning to distribution, Airbnb makes up 51,552 of registered short-term rental listings, whereas Booking.com comes in at 20,518 and HomeAway at 13,422. 

While the ADR for HomeAway listed properties is £217, Airbnb properties are seven per cent lower at £203 per night.

Looking at these rates across a 12-month period (from October 2018 to September 2019), London’s average ADR of £158 sits much higher than the European short-term rental ADR of £122. 

In the summer, July sees peak performance with December closely following. Jade Tinsley, consultant at Transparent Intelligence, advises property managers to use market intelligence in order to align rates with seasonal demand, and to take market averages into account for a contextualised price point. 

Rates and occupancy in London

Although occupancy rates do not mirror this trend, the introduction of the 90-day regulation in 2017 means that no listing can exceed 25 per cent of occupancy annually, therefore many unoccupied listings have brought this average down.

In terms of guest demographic, 30 per cent of visitors are British, whereas the second most frequent guest is American at 18 per cent. The American traveller pays the highest ADR at £184. France and Germany make up 8 per cent and five per cent of guest nationality respectively. 

Regarding reservations, the average booking in London for 2019 was three guests staying for four days, booked 27 days in advance. Accordingly to Tinsley, these numbers are fairly typical of European capitals, yet she urges property managers to ensure that prices are appropriate for the demand through a booking window. 

To read the full report, visit the Transparent website here