Londoners are missing out on £4.5bn a year, simply from leaving their homes empty when they go away.
Think about that figure: it’s the same amount that George Osborne claimed would be wiped off the Scottish economy if there was a Brexit vote, and equals the revenue the 20 Premier League football clubs are forecast to make in the forthcoming season.
Populus found that Londoners leave their home empty for, on average, about two-and-a-half weeks per year, be they on holiday, visiting friends and family, or travelling for work. There are 600,000 homes that sit empty for four or more weeks a year, 100,000 for at least 10.
I have a bias. My company, UnderTheDoormat, is a start-up that allows Londoners to let their homes without any concerns. We look after everything, from fresh linen and toiletries to providing insurance during guest stays, which marks us out from bigger names that require a homeowner to be onsite when renting out a spare room or whole flat – awkward when they are out of town.
We’ve welcomed more than 650 visitors to London since launch 18 months ago and are close to completing an initial crowdfunding round that will raise £175,000 for expansion. Many of our investors will also let their homes with us.
We’re one of a new wave of firms that are pioneering the next stage of the ‘sharing economy’, which sees entrepreneurs rent or borrow assets owned by others who are unable to use them to their full potential. The new phase is to provide far better service – for us that means offering hotel quality in the comfort of a home.
The sector is sometimes ignored by the media because the very phrase ‘sharing economy’ sounds like a wishy-washy PR term. Indeed, as PricewaterhouseCoopers stated recently, a decade ago the sharing economy meant little more than a type of transaction used informally between friends and family.
But, as PwC also found, this sector is already valued at billions upon billions today. In 2014, the Big Four accountant's number-crunchers calculated that five sub sectors – peer-to-peer finance, online staffing, peer-to-peer accommodation, car sharing and music video streaming – was worth $15bn (£11.42bn) and will grow to $335bn (£255.18bn) by 2025. Around £9bn of that 2025 figure will be generated in the UK.
The sharing economy is booming in the US: JP Morgan recently found that Americans working for sharing economy firms boost their earnings by 15%. These firms include household errand site TaskRabbit, on which you can outsource cleaning and even shopping, to the cheekily-named AirPnP, which sees homeowners rent out their private toilets when people are caught short with no place to go.
Around 2.5m people in the US are earning extra money from the sharing economy and the UK is ripe to take similar advantage.
The Government is prioritising growing the sector as it looks to rebalance our economy from its dependence on financial services in the City of London. I sit on the Government’s Sharing Economy Task Force and, in a report published in January, Sajid Javid, the then business secretary, described the sector’s growth in the UK as “phenomenal”.
He pointed out that “people up and down the country [are] embracing new ways to share their assets, talents and free time with the help of innovative technology”, and added that the impact is not just economic. “It’s creating new networks within communities and having a positive impact on the environment by using resources more efficiently,” he said.
That report cited another figure from PwC: 3% of the UK workforce is providing a service through a sharing economy platform. There is, then, huge capacity for growth.
Whether you want to become an insured cat sitter through the likes of Cat in a Flat, or rent out your home for a few days with UndertheDoormat, there are simple opportunities to make extra money with the skills, time and assets we all leave redundant for too much of the time.
A nascent concept only 10 years ago, the sharing economy will soon become as commonplace a sector as retail, industry, and manufacturing.