Assessing the impacts of Airbnb listings on London house prices

James Todd,Anwar Musah,James Cheshire

doi:10.1177/23998083211001836

James Todd, Anwar Musah + Show 1 more

Open Access

https://doi.org/10.1177/23998083211001836

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Abstract

Over the course of the last decade, sharing economy platforms have experienced significant growth within cities around the world. Airbnb, which is one of the largest and best-known platforms, provides the focus for this paper and offers a service that allows users to rent properties or spare rooms to guests. Its rapid growth has led to a growing discourse around the consequences of Airbnb rentals within the local context. The research within this paper focuses on determining impact on local housing prices within the inner London boroughs by constructing a longitudinal panel dataset, on which a fixed and random effects regression was conducted. The results indicate that there is a significant and modest positive association between the frequency of Airbnb and the house price per square metre in these boroughs.

Highlights

BackgroundThe so called ‘sharing economy’ is a new and rapidly growing sector that revolves around the sharing of existing under-utilised physical assets on digital platforms, enabling the interaction of private sellers and private buyers (Allen, 2015: 25; Srnicek, 2017; Wallsten, 2015)
Conducting the model, we find there to be a significant £14.78 per m2 increase in house prices, when there is a unit increase in the frequency of Airbnb listings
Results from multivariable models incorporating Airbnb listing as random slope After including indices of multiple deprivation (IMD) as a confounding variable and making further adjustments for Airbnb listings as a random slope, we found a marginal reduction in magnitude in terms of Univariable fixed effect model (Unadjusted)

Summary

Introduction

The so called ‘sharing economy’ is a new and rapidly growing sector that revolves around the sharing of existing under-utilised physical assets on digital platforms, enabling the interaction of private sellers and private buyers (Allen, 2015: 25; Srnicek, 2017; Wallsten, 2015). Recent technological advancements, such as the proliferation of internet access and smart phones, has accommodated the rise in activity within this sector, and shifted a large proportion of economic activity to the internet, which has since been coined the new EPB: Urban Analytics and City Science 0(0). It offers over six million listings in over 191 countries (Airbnb, 2019)

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