UK short-term rental sector reacts to Friday’s election result
UK: The UK short-term rental sector has given a mixed response to the result of Thursday’s general election, which saw the Conservative leader Boris Johnson secure the party’s largest majority since Margaret Thatcher in 1987.
While some leading figures from the industry cautiously welcomed the supposed end to a long period of limbo and political uncertainty stemming from the 2016 EU Referendum and subsequent vote for Brexit, others believed it could negatively affect growth in the sector.
With the Tories now claiming 365 seats in the UK Parliament [an overall majority of 80], they now possess a clear mandate to take Britain out of the European Union. Regardless of individual stances on the Brexit debate, which has generated division across the United Kingdom, some industry figures welcomed the degree of clarity that the election now brings.
STAA [Short-Term Accommodation Association] chair Merilee Karr had optimism for the future of the domestic short-term rental industry on the back of the election result.
She said: “The election result should bring some much needed stability to the country.
“Knowing that we now have a working government should provide greater consumer confidence in the economy. This, in turn, could lead to an increase in discretionary spend and a greater demand for accommodation as people look to travel a bit more.
“We expect the short-term rental market will continue to grow and make a valuable contribution to the UK economy providing more choice for consumers, more accommodation for tourists, more optimal use of space, added income for individuals, added income for government through taxation, greater employment opportunities and bringing more custom to local businesses.
“Consumer confidence also helps the property market, and with the certainty of which colour government will now be in charge for the next five years, people will be able to make decisions on home purchases. We see more people becoming short-term rental hosts and guests and reaping the benefits this vibrant sector offers,” she added.
Flamingo Short Lets managing director Emily van Eyssen said: “I think before the Brexit vote, London especially was booming with multiculturalism, which was very important for the short-term rental industry. London was the financial centre of the country.
“There has definitely been a reduction since then of Europeans visiting the UK since the vote for work purposes, which is quite significant.
“On the flip side of that, the low pound is seeing more people visiting London as a shopping destination, rather than a commerce one. A cheap pound right now would be fantastic to encourage investment and also tourism.
“One thing I find worrying is a lot of my staff are Eastern European so it could push prices up quite considerably if they were to leave, so staffing levels would be a concern.
“On the other hand, I think people knowing where they are will bring some stability to the property market, which is much needed. On the housing side of it, Brexit affects the short stay and serviced accommodation market, and there is definitely a relationship there.
“Ultimately, a bit of business stability cannot be that harmful,” she added.
More Bookings Direct Conference director Damian Sheridan expressed concern for the UK sector and future growth once the election result became clear.
He said: “My feeling is that the election result could negatively affect the growth of the UK short-term rental industry over the coming 12-18 months. Prospective European alienation and a stronger pound could well result in fewer tourists arriving from our continental neighbours.
“Furthermore, in terms of UK travellers, warm destinations like France, Spain, Portugal and Italy will continue to deliver outstanding appeal to British families as will European city breaks for younger generations. Cheaper holidays may negate any recent recent rise in UK staycations.
“Whatever your political stance, I think most would agree we are all in for a bumpy ride during the Brexit implementation period in 2020,” he added.
The pound rallied against the euro and the dollar on the news of the result.
Phil McHugh, chief market analyst at Currencies Direct, said: “The sheer size of the majority was truly thumping and helped to push the pound up another leg higher. The Conservative majority now lends clout to Boris Johnson and gives both options and stability in the legislative process not seen for some time.
“The main uplift in the pound was in the run up to and on the release of the exit poll. Focus will now shift to what happens next – we know the first part of Brexit will be delivered with the withdrawal agreement looking sure to sail through.
“However, the markets will be keeping a cautious eye on the longer term, with the final trade agreement with the EU still to be negotiated within a very tight timeframe,” he added.
The City of London experienced its busiest trading day of the year on Friday. More than 800 million shares changed hands across the FTSE 100 in the first two hours of trading – more than the volume for an average day, while the FTSE 250 index, which contains medium-sized UK-focused companies, was up more than 1,000 points in the morning to 21,910, an all-time high.