AirBNB was founded in 2008. It was seen as one of the leading examples of what has become known as the ‘sharing economy’, in which people were directly in contact with one another instead of through companies.

It has 500,000 listings in 192 countries and is said to be worth some £6 billion. It describes itself as providing an online platform which connects ‘hosts’ who create listings for accommodation that are made available for booking by ‘guests’.

AirBNB took off in the UK during the London Olympics. Many of the lets are for the whole flat or house, with the guests staying surrounded by other people's stuff but with the run of the place.

However, it is also very common to get spare rooms in flats or houses where the owner actually lives. Guests end up sharing with someone they know nothing about and an owner is letting strangers into his home.

After a series of problems relating to ransacking the flats and potential identify theft, AirBNB now provides a £600,000 insurance guarantee to its host as well as a 24-hour support line.

AirBNB state that posting a fake property and running off with the money is impossible because it holds the payment to the owner until 24 hours after check in.

The service is principally self-regulated and relies on users to provide feedback scores.

There are certain straightforward precautions you should take before you consider renting your home out in this manner.

First is to check that you are entitled to do it. If you own a house then it is generally not a problem although it might be a good idea if you are going to do this on a regular basis to check with your mortgage lender and get their consent.

If you have a flat it will be necessary to check the lease. you must make sure that there is no prohibition against sub letting or any restriction against hosting.

If you rent a social housing flat or house then you cannot use AirBNB as there is an absolute prohibition against sub letting the whole of the property.

If, however, you are going to share the accommodation then this may be permitted but you must get the consent of the landlord.

Ordinary safety precautions should be complied with. You should indicate local emergency numbers and the local hospital and an emergency contact number for you.

A first-aid kit should be made easily available. You should also go through the house and identify any areas where a guest might trip or fall and either remove the hazard or mark it clearly.

AirBNB does offer what is called a host guarantee but that will not replace home owner insurance or renter’s insurance.

AirBNB will insure for damage to the property and belongings but not jewellery and cash and a limited cover for loss of income if a guest cancels.

However, you should check with your own building's insurer to cover other items which may not the covered under the AirBNB policy – for example if someone is injured while at your home you could find yourself liable for the reasons given above and it is best to ensure that the insurer is made aware of what you are doing.

The money you earn from AirBNB is in principle taxable, particularly if you rent out your entire home. There may be some taxable allowances.

There is a ‘rent a room’ allowance scheme with the Inland Revenue which lets you earn up to a threshold of £4,250 tax free from letting out furnished accommodation in your home. It has to be your main home and only if you rent out a room.

The scheme itself has a number of exceptions – you cannot use the scheme for homes that have been converted into separate flats.

These developments are not uncontroversial. There is opposition from the B&B and the hotel industry.

The Economist reported last year that if AirBNB continues to grow at its current rate by 2016 it will be taking 10 per cent out of hotel takings, enough to send many businesses under.

In Barcelona, AirBNB has just been fined 30,000 euros for breaching local tourism laws, while in New York, prohibitions have been introduced against renting out apartments for less that 30 days unless the owner is also living in the property.

The majority of bookings however appear to pass off successfully and it would appear to here to stay.