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  • Writer's pictureScott Mackey

Which mortgages allow AirBNB?

Updated: Jan 12, 2023

In recent years, short-term rentals through platforms like Airbnb have become increasingly popular in the UK. However, many mortgages have restrictions on the use of a property for short-term rentals. This is because lending institutions consider renting out a property on a short-term basis to be a higher risk than traditional long-term rentals.

There are two types of mortgages in the UK that allow short-term rentals like Airbnb. They are:

  1. Buy-to-let Mortgages: These mortgages are specifically designed for properties that will be rented out, either on a short-term or long-term basis. Buy-to-let mortgages usually have higher interest rates and stricter lending criteria compared to standard mortgages.

  2. Holiday Let Mortgages: This type of mortgage is designed for properties that are used for holiday rentals. These mortgages have similar criteria as a buy-to-let mortgage and usually require the property to be in a tourist area or a holiday home destination. Also, a significant percentage of the rental income must come from holiday letting, and the property should be vacant for personal use for not more than 4-6 weeks a year.

It's important to note that it's also essential to check with your mortgage provider before renting out your property on a short-term basis. Some providers may have restrictions on short-term rentals, even if the mortgage is a buy-to-let or a holiday let mortgage. Failure to adhere to these restrictions could put the borrower in breach of their mortgage contract and result in additional fees or even foreclosure of the property.

Additionally, the laws and regulations regarding short-term rentals such as Airbnb vary by local council. It is important to research and comply with local laws and regulations, such as obtaining licenses and paying taxes.

In summary, while most mortgages in the UK do not permit short-term rentals like Airbnb, there are two types of mortgages that allow such rentals - Buy-to-let mortgages and Holiday Let Mortgages. However, these type of mortgages have different requirements, interest rates, and criteria, it's important to check with your mortgage provider and comply with local laws and regulations before renting out your property on a short-term basis.

If you would like to talk over this subject or any other with us, please feel free to get in touch

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