Chancellor George Osborne announced in the Spring Budget that short-term landlords are to be given a £1,000 tax-free allowance, which begs the question – are home-lettings websites such as Airbnb set to become a viable alternative route to market for buy-to-let investors?

The new tax allowance is intended to boost the number of micro-entrepreneurs who make money online from the likes of Airbnb. The announcement followed hot on the heels of JLL’s recent research that the number of properties listed on Airbnb in London has risen 150-fold in five years from just 171 in 2009 to more than 25,500 in 2015.

But how big can it get in London? And can it become a viable alternative for landlords versus the buy-to-let market?

Research from specialist short-let management firm, Hostmaker, shows London’s 25,500 Airbnb listings equate to 2.9 per 1,000 residents.

In contrast, Paris – the largest Airbnb market in the world – has 35,000 listings, equating to 13.1 per 1,000 residents within the City of Paris. If London were to see take up rise to the levels of the French Capital, there would be more than 111,000 listings here.

Similar to Paris, London attracts millions of visitors each year and following the public backing and tax allowance announced by Osborne, it is not unreasonable to assume we could see a further rapid rise in listings in line with the French ratio.

JLL’s research found the most common reason for listing homes on Airbnb was simply to raise extra income. The second most common reason was to fill a vacant home between tenancies, suggesting an increase in the use of Airbnb by private rental landlords.

Data from InsideAirbnb.com shows that the average weekly listing price for Airbnb in London is £450pw, a third more than the average London weekly rent of £335pw. A decent increase, but is this enough to turn the head of a buy-to-let landlord?

If a property is used for more than 90 days a year for short-term rentals, it could be considered for a change of use from a residential property to a hotel.

This means at those average listings prices, assuming full occupancy, the average rental property in London will generate circa £17,000pa in rental income, versus an average Airbnb property generating £6,000pa.

Landlords will still prioritise the private rental route favouring long term stable income. But in reality it does not have to be an either-or question. Landlords who target the student market for instance could agree nine month contracts with their student tenants and then use Airbnb for the summer months as a strategy to maximise rental income.

Airbnb is also proving to be a useful way of minimising void periods and ensuring properties not only earn income when otherwise vacant, but actually at a better weekly rate than when on the private rental market.

For these reasons, it seems increasingly likely that short-term lettings website such as Airbnb will play an increasingly important role in helping landlords to maximise their rental income.