Forging an industry rebrand
Co-founder and CEO Guy Westlake believes the short-term rental industry needs to become more professional. “Legislation governing short-term property rentals and homestays is not moving with the times,” he says. “Moreover it is stifling innovation in the residential sector, as well as limiting how property investors make money.”
Despite new laws being slowly introduced, they are usually “informed by entities that lack a vision or strategy of how to solve pressing industry challenges, and unlock a brighter future”, he adds.
Short-term rentals and homestays are essential in helping to solve the UK’s housing crisis, says Westlake. “They also facilitate better lifestyles for people, fund their holidays and attract tourists who contribute to local economies,” he says.
Maximising property yield
To encourage participation in the “sharing economy”, Westlake created Lavanda to offer solutions and services for property owners and landlords, helping to monetise vacant properties and those subject to sale.
The company offers two core products. Home by Lavanda provides an end-to-end, hospitality-led, technology-enabled super short-term rental solution for homeowners. Lavanda Agent partners with estate agents to power an industry-first super short-term rental solution for properties awaiting sale or long-term rental.
Horror stories about misbehaving tenants, complex legislation and disreputable agents mean the industry has developed a reputation for being problematic. But Westlake argues the short-term rental process is reliable, providing your solution is professional and you do your due diligence.
We want to help the rule makers understand how to improve the industry, and if we don’t achieve that part of the mission, then we fail.
Guy Westlake, Lavanda
Collaborative intellectual capital
Westlake says that confusing regulation can create a culture of short-term rental companies often trying to undermine the authorities and exploit rule loopholes. Short-term rental laws, such as the 90-day annual property rental limit, are often ignored, he says.
Rather than defaulting to flouting local authority regulations like some residential real estate companies, Westlake is striving to build a “100% transparent and compliant” business model.
To achieve this Lavanda takes a leading role in educating estate agents, local authorities and investors of the benefits of short-term rentals for urban regeneration. “We want to help the rule makers understand how to improve the industry,” says Westlake. “If we don’t achieve that part of the mission, then we fail,” he says.
Investors with credibility
Although finance is essential, Westlake looks for more than just money when raising investment. He is only willing to take investment from individuals who will support Lavanda’s long-term cooperative vision. Westlake believes short-termism in certain investment management circles is misaligned with Lavanda’s objectives.
With a clear vision for capital-raising, Westlake says the company has prioritised working with investors with industry experience, business credibility and strong networks. Lavanda has successfully raised over £2.5m in equity capital.
Long-term development plans
Backed by aligned investors, Lavanda has created a high-profile board, including Harry Hill, Rightmove’s founder, PurpleBricks’ co-founder Kenny Bruce, and Sir Terry Leahy, the former CEO of Tesco.
With its products and network in place, Lavanda is planning a further £3.5m round of fundraising. The company will use the investment to further roll out its industry relationships and embark on national and international expansion.
“It is a long play as there is a global industry that wants the sector to progress,” says Westlake. “We plan to be the driving force in moving that initiative forward.”