Can I rent out my home on Airbnb if I have a mortgage?

With holiday season in full swing and many of us looking at leaving our homes for a week or two in search of the sun, the thoughts of advertising your home as a holiday-let to make a bit of spare cash may seem quite appealing.

The appeal and the caution

If you’re comfortable with the concept of strangers spending time in your home, possibly lounging on your furniture and poking through your collection of knickknacks and houseplants, then renting out your property on the likes of Airbnb, Booking.com, Vrbo, Homestay and the like has seen a real boom in recent years.

However, as easy as it may be to list your home on these websites, there could be some serious consequences for your mortgage if you haven’t done your homework first.

Holiday lets and your mortgage lender

Different lenders have different rules regarding Airbnb and similar holiday-let platforms, and many existing residential mortgages currently prohibit letting the property without the lender’s permission – which includes Airbnb.

Alternatively, some lenders may allow homeowners to let their property with certain conditions, or for certain timescales – the devil is in the detail, and the small print that you’ll have signed when you applied for your most recent mortgage.

Therefore, before listing your home – it’s important to consult your documentation and to contact your mortgage lender to inform them that you wish to do this. As your mortgage adviser, we are able to assist if you have any specific queries on your circumstances, so just let us know if you need any guidance here.

Additional considerations

Alongside the mortgage, there are other implications of letting your home out – for example taxation and home insurance too.

Using your home to generate an additional income can leave you liable for extra tax and National insurance if you are earning over the current thresholds¹, and more about taxation can be found on the Government website here – https://www.gov.uk/renting-out-a-property/paying-tax. If you do have queries on the tax implications, it’s always worth seeking an independent tax adviser before taking any action.

Consulting your home insurer is also crucial before listing your property on Airbnb. Your insurer might charge a one-off fee or increase your premium, or you may be able to obtain specialist cover online.

Conclusion

Whilst letting your home out via Airbnb or the other online holiday let platforms may not be as straightforward as one might reasonably expect, it can be a way to increase your income and make more use of your otherwise-vacant property while you’re elsewhere. Just ensure that you’ve conducted the sufficient checks on your mortgage policy and that you’re up to speed on the exact implications for both tax and home insurance, and then you can start to delve into the world of holiday lets.

Think carefully before securing other debts against your home or property. The Financial Conduct Authority does not regulate some forms of Buy to Lets. Your property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

Sources

1. Gov.uk (2024) Renting out your property. Available at: https://www.gov.uk/renting-out-a-property/paying-tax [Accessed 17 Jul 2024]

All the information in this article is correct as of the publish date 25^th July 2024. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content, and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

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