Fancy letting your home or buy to let on AirBnB? You should probably read this...

Using websites like AirBnB has become very popular with home-owners, holiday home-owners and buy to let landlords. But what do the mortgage lenders think of this growing practice? And are you in breach of your mortgage terms? It’s important to know where you stand, as Jeni explains.

AirBnB is an amazing concept. It was originally launched as a website where you could advertise a room in your home to visitors, after the founders couldn’t afford to pay their rent and tried to make up the shortfall by letting their loft to delegates visiting San Francisco for a conference.

Since then many people have used AirBnB as a way to earn a few bob, and it has made short term accommodation all over the world more affordable than traditional hotels, especially if you don’t mind sharing with the host/owner.

Understandably, this concept has evolved and AirBnB is now also being used by people to advertise their holiday homes and even their buy to let properties to visitors looking for short term accommodation. Why? Because it can be very profitable.

From an income-generating perspective, this sounds rather wonderful, however, it is worth noting where this leaves you when it comes to your mortgage.

Before writing this article, we did some research and spoke to many major lenders to understand their policy on AirBnB’ing.

The mortgage on your home and AirBnB

For residential mortgages, only two lenders said that their T&C’s permitted the home-owner to offer the room/property to let on AirBnB (and other similar sites). All the other lenders said that any borrower doing this was in breach of their mortgage conditions.

Buy to let mortgage and AirBnB

For buy to lets we got, wait for it… Absolutely NO BUY TO LET LENDERS allow this – even those who allow holiday letting!

Now, particularly on the buy to let side of things, some would say that if you have a rental void, and have the option to fill the property for a few days to bring in some revenue, where is the harm? And that is a fair question BUT be mindful that it is not allowed.

It’s also definitely not allowed if you have a buy to let mortgage and you are using the property ONLY for short term lets advertised on AirBnB and other sites.

Furthermore, if you are thinking of remortgaging a buy to let property and you have it listed on AirBnB (or similar site), it’s worth noting that lenders do run checks to see if the proposed security is listed.

Equally, lenders can often tell from bank statements how a property has been rented out historically.

Consequences

The fall out of this is that if you apply for a remortgage and have been doing this type of letting, you may come unstuck.

And now for the good news

The good news is that lenders both in the residential and buy to let space, are becoming aware of the rising popularity of this type of letting, and some are telling us that they are reviewing their lending policy to see whether they can accommodate this within their realms of comfort.

But for now, you have been warned!

Next steps

If you have any further questions on this topic, do get touch. You can talk to me or one of my qualified colleagues on 0345 345 6788.

Author