Abstract
Based on a microeconometic model, this paper examines the effect of Airbnb in rents and house prices. Using borough-level data from the city of London between 2016 and 2019, we estimate System GMM regression models that indicate that Airbnb presence has an upward effect on the prices of both house purchases and of rentals, even disaggregating by categories; but the effect is stronger on house prices than rents, as theorized by the model. This evidence confirms that Airbnb affects the housing market by increasing the value of real estate properties.