AirBnb to lose £325million in London bookings after rule change imposes 90 day limit on hosts

ACCOMMODATION booking platform Airbnb is set to lose out on more than £325m this year as a result of a new cap limiting short-term rentals to 90 days per year.

The company last month announced that landlords using their platform will no longer be able to let out an entire home for longer than three months, in a bid to curb London's housing crisis.

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But the cap - which will become effective from spring this year - will have a disastrous effect on the company's profits.

According to which cites data from accommodation search engine AllTheRooms, almost half of Airbnb nights booked in London - Airbnb's second-largest market - will be threatened by the 90-day cap.

While many travellers will just look at different listings on the platform, many will come off the platform altogether, AllTheRooms said, leading to a more than 30 per cent drop in London bookings.

As a result, Airbnb could lose more than £325m in bookings.

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AllTheRooms said it now predicts London reservations will rise from $600m in 2016 to around $812m in 2017. Before the 90 day cap was introduced, the company said it foresaw a jump to $1.24bn.

Airbnb disputed the research. A spokesman for the company told the Sun Online: "This analysis is wrong and based on false data and flawed methodology.

"The majority of entire home listings in London are booked fewer than 31 nights a year and will be unaffected by the changes we've introduced."

The typical Airbnb host in London can earn £3,500 tax free by sharing their space for 50 nights a year.

Do the new rules affect you?

The rules impact landlords who rent out entire homes for longer than three months in a year.

From spring 2017, unless hosts can show that they have the required permission to share their space more frequently, they will have to restrict all short-term lets to under 90 days.

The new rules do not affect people who rent out individual rooms within their homes.