World Cup short-term rental income surge highlights role of local housing regulation

A new analysis of short-term rental income during the recent World Cup has found that host cities experienced a 60% average surge in earnings for holiday let properties, but the increase was far from evenly distributed. The key variable, researchers say, was the strength of local housing regulation.

The findings, reported by Smart Cities Dive, come as London continues to debate its own approach to short-term lets. The capital has seen a rapid proliferation of holiday rentals in recent years, particularly in central boroughs such as Westminster, Camden and Southwark. A 90-day annual limit on whole-home lets has been in place since 2015, but enforcement remains inconsistent and the rule does not apply to private rooms or properties registered before the cap was introduced.

Por que importa

The World Cup data offers a real-world test of what happens when a sudden, concentrated demand spike hits a city’s rental market. In cities with few or weakly enforced short-term rental rules, the income surge was dramatic. In those with robust registration systems, occupancy limits or outright bans, the increase was contained.

The analysis did not name individual host cities, but the pattern is consistent with previous research on event-driven rental spikes. The 2012 London Olympics, for example, saw a 30-50% increase in short-term listing volumes in the months before the Games, according to a 2014 study by the University of Surrey. More recently, the 2022 Commonwealth Games in Birmingham prompted a similar, though smaller, surge.

Contexto

For London, the implications are twofold. First, the data reinforces the argument that regulation matters. A 90-day cap is better than nothing, but it is not the same as a registration system that allows councils to track and enforce limits. Second, the World Cup experience shows that large events can distort local housing markets for months, not just days. Even a temporary spike in short-term rental income can reduce the availability of long-term housing, particularly in neighbourhoods with already low vacancy rates.

The Greater London Authority (GLA) has been consulting on potential reforms to the short-term rental regime since 2023. Options under consideration include a mandatory registration scheme, tighter enforcement powers for boroughs, and a lower annual cap in high-demand areas. The government’s Levelling Up and Regeneration Act 2023 also includes provisions for a national registration system, though implementation has been delayed.

Que sigue

The concentration of the income surge matters as much as the average. In cities with weak regulation, the gains were not spread across the whole market but were captured by a small number of hosts with multiple properties. This pattern is familiar to London housing researchers. A 2022 study by the London Assembly found that just 10% of hosts accounted for over 40% of all short-term listing revenue in the capital.

For renters, the effect is indirect but real. When a significant share of housing stock is diverted to short-term use, the supply of long-term rental properties shrinks, pushing up rents. In central London, where the ratio of short-term listings to long-term rental properties is highest, the impact on affordability is measurable. A 2019 analysis by the London School of Economics estimated that a 10% increase in short-term listings was associated with a 1.5% rise in local rents.

The World Cup data also highlights a timing issue. The income surge began weeks before the tournament started and continued for several weeks after it ended. This extended window means that even a short-duration event can have a multi-month impact on the rental market. For London, which hosts major events almost year-round – from the Notting Hill Carnival to the London Marathon to the FA Cup final – the cumulative effect could be significant.

What the analysis does not tell us is how much of the surge came from existing hosts increasing their prices versus new hosts listing properties for the first time. The distinction matters for policy. If the income spike is driven primarily by price increases, then caps on rental income or dynamic pricing might be more effective than supply-side measures. If it is driven by new listings, then registration and enforcement become the priority.

London’s boroughs have been pressing for stronger tools. Westminster City Council, which has one of the highest concentrations of short-term lets in the country, launched its own registration scheme in 2022, but it relies on voluntary compliance. The council has argued that without a mandatory national or London-wide system, enforcement is prohibitively expensive and inconsistent.

The GLA’s consultation is expected to produce recommendations later this year. Options on the table include a London-wide registration database, real-time data sharing between platforms and councils, and a reduction in the 90-day cap to 60 or even 30 days in the most pressured areas. Any changes would need to balance the economic benefits of tourism with the housing needs of residents.

For Londoners, the World Cup data is a reminder that housing policy does not operate in a vacuum. A global sporting event thousands of miles away can still shape the rental market on their street. The question is whether the city’s regulatory framework is strong enough to absorb that shock without pushing more residents out of the private rental sector.

Source: Smart Cities Dive, “These cities’ short-term rental income spiked the most from the World Cup”, https://www.smartcitiesdive.com/news/world-cup-host-cities-short-term-rental-income-increase/826606/