From it’s launch in 2008 Airbnb (Air Bed and Breakfast) has grown into a worldwide holiday accommodation business. They allow homeowners (Airbnb hosts) to rent out a room, or their entire property, to paying guests who have booked via the Airbnb website – airbnb.co.uk.
Airbnb does not own any properties themselves and the hosts are free to decide their own level of rental fees which are charged to guests via the online platform. Airbnb is now a fundamental part of the short term letting industry.
Due to it’s huge growth, Airbnb has attracted some interest from property investors. Rental charges for properties used for just short periods are more than the equivalent time in a standard let property. So if occupancy rates are high the rewards for owners (hosts) can be very generous.
Can you get a mortgage for an Airbnb property?
Yes, mortgages that allow for Airbnb letting are available.
UK lenders are having to adapt to this new way of renting out properties and with the owners of buy to let properties seeking alternatives this market is set for growth.
This will depend on how you intend to use the property.
Occasionally rent out a single room
For your main residence most lenders will probably be OK with this. You would need to inform the lender of your intentions. Providing that it’s just occasional short lets you should find that the majority of lenders are quite relaxed.
If it’s your second home/holiday home then the lender will normally expect some minor periods of holiday letting.
Occasionally renting out the whole house
At this stage some of the standard mortgage lenders will not be so keen if you rent out all of your home but it will depend on how much of the year is taken up by Airbnb.
If you have a holiday home with a second home mortgage then many lenders will be OK up to 90 days each year.
Actively renting out the whole house via Airbnb
If this relates to your main residence then you are now homeless!
This option does not really work for your own home. For investment properties and second homes you will need a holiday let mortgage.
These lenders know that the property is a short term rental and will be expecting you to actively market it for holiday letting for most of the year.
Suitable mortgages: Holiday let mortgage
How does Airbnb affect my current mortgage?
If you plan to use your house as an Airbnb host, you must disclose this to your lender. For residential mortgages you will need to approach your lender and explain how you intend to utilise Airbnb.
The level of Airbnb usage as explained above will determine their reaction.
You will need your lender to provide a ‘consent to let’ to allow lettings from Airbnb. To grant a ‘consent to let,’ most lenders will charge an arrangement fee.
Can I change my buy to let over to Airbnb?
A buy to let mortgage allows you to rent out a residential investment property to tenants on a long term basis via an AST agreement.
Outwardly using it for Airbnb infringes all of those aspects. However, some buy to let lenders operate with holiday lets as well so they may be amenable.
You will need to inform your lender about the proposed changes.
If the lender declines your request then you will need to remortgage over to a holiday let mortgage that allows Airbnb lets.
Do all holiday let mortgage lenders allow Airbnb?
Holiday let mortgage lenders do prefer properties to be marketed via more established routes such as an experienced holiday letting agent. We don’t believe there’s much difference between them and if anything, Airbnb may drive more traffic and guests due to their size and market share, thus improving occupancy.
However, we do work with a number of lenders who are a bit more relaxed with this new way of letting a holiday property, including applications from limited companies.
Can my Airbnb be a Furnished Holiday Let?
Yes this could be possible.
A Furnished Holiday Let (FHL) is an HMRC definition of a certain type of rental property. The property must be located in the UK, Ireland or EEA countries. It will be let out to paying guests for short durations only. ie. weekend breaks and holidays.
This is fundamentally different to a buy to let property where the paying guests are tenants who will occupy the property as their main residence for much longer periods of time.
By qualifying as a Furnished Holiday Let you get to benefit from the FHL tax rules. However, this won’t work if you are just renting a room.
Can any property be used for Airbnb?
No. So far we have concentrated on the restrictions related to mortgages.
You should investigate any Restrictive Covenants relating to your property, this is especially important for leasehold properties such as flats. Common covenants mention noise and nuisance and running a business.
A 90 days rule applies to Airbnb’s in London. It means that your property can only be rented for 90 days in any calendar year. To go beyond this you would need to seek permission from the local council.
Read more Holiday Let Property Guide.
What about home insurance?
Again you will need to approach your home insurance company for clarification. For insignificant room lets they will probably be OK.
But if you are renting out the whole property it’s probable that a different policy will be needed.
If the insurance is not right then any future claims may not be honoured. These claims could relate to building damage, theft or a guest having an accident whilst staying in your Airbnb.
Should I use a mortgage broker?
It is possible for you to deal direct with a lender that accepts Airbnb letting. However, there are 2 main aspects where a holiday let mortgage broker can be of benefit:
- CHOICE – By using an experienced mortgage broker you could possibly double the number of lenders and schemes available, enabling you to find the best holiday let mortgage.
- TIME – Going it alone means spending a lot of time researching and speaking with lenders.
Speak to an expert
We have been helping clients with their holiday lets since 2006 and our brokers have the widest possible experience in this sector. An Airbnb holiday rental mortgage will allow you to purchase a property that will be let out via Airbnb to paying holidaymakers, whilst also allowing you to personally use it as a holiday home each year.
Every one of our clients has a unique need and our brokers love a challenge. So, even if your situation is not ‘the norm’, we can usually help.
Call 020 8301 7930 to start your journey with us.