Critics claim short-term subletting on sites like Airbnb are pushing up local prices and reducing the number of homes available for those who need to rent long-term.
Around half of the 110,000 UK listings on Airbnb are in London.
Councils in areas including Islington, Camden and Westminster have all raised concerns about the impact on the market.
David Smith from the Residential Landlord's Association explained: "Properties are being taken out of the rental market and being moved into short-term tourist oriented letting.
"That means there's less property available for people who actually want to move somewhere to work and make it as their home.
"It also means that those properties are available for shorter bases for those people so they have less security in their letter and it's driving up rents as well."
But Airbnb rejected the claims, saying its entire home listings account for less than 1% of the housing stock in Greater London, with the majority of hosts sharing their own homes to boost their income and pay the bills.
Patrick Robinson, Airbnb's Director for Public Policy in Europe, the Middle East and Africa said the company is meeting concerned councils.
But he added: "When you're talking about a city that needs to build over 100,000 properties a year for the next few years just to meet current housing demand, it seems unreasonable to suggest that short term rentals are having the driving impact on housing costs in London"
Speaking at the Labour Party Conference, London Mayor Sadiq Khan acknowledged the city's housing crisis and said he was working on plans to build more affordable homes.
Islington Council told Sky News the issue was a "serious concern" with initial online research showing properties being let short-term for nearly twice the price as they are advertised as a long-term let.
Councillor Diarmaid Ward said: "The rise of this sort of subletting has led to complaints about properties that are let online for one or two nights for parties, holiday lets, and B&Bs."
In Westminster, 1,200 listings are under investigation for breaking rules in London which limit short-term lets to 90 days unless the host seeks permission to make them longer.
Councils in Edinburgh, Manchester, Birmingham and Bristol which have growing Airbnb membership say their rental prices do not appear to have been affected.