Accommodation site Airbnb has seen bookings in London rise by 130% in the last year, according to new data from Colliers, with 4.62m nights of accommodation booked on the home-sharing site. But some owners hoping to cash in on this trendmay be breaching their mortgage contracts by doing so.
People hoping to make some extra cash from their only homes are likely to havea residential mortgage - and Which? has found that many high-street lenders may not always allow such properties to be used for short-term letting.
Which? explains how using Airbnb or similar house-sharing platforms might impact on your mortgage and how you can protect your financial arrangements.
Ownerson Airbnb or similar house-sharing platforms often offer to rent out their entire property, while spending those nights with friends or family member. But many mortgage lenders see this as a breach of their mortgage terms, as you're making money from yourproperty, not using it as your residence.
Which? asked high street banks whether listing a property with a residential mortgage would be a breach of their mortgage terms and conditions:
If you breach your mortgage contract, you could face a range of penalties - from needing to pay higher interest rates to, in the worst case scenario, having the loan called in. But most lenders indicated they would work with their customers to find a solution.
MetroBank operates differently. In November 2016, it announced that all customers on a residential mortgage would be allowed to let out their properties for up to 90 days - an exception brought in specifically to allow clients to use Airbnb and other home-sharing platforms.
Instead of offering your entire apartment on Airbnb, it's also possible tolet out a room within your home.
The majority of lenders will allow owners to take in 'lodgers', meaning a person who pays to live in a room at the property while the owner also lives there. In this situation,you may be allowed to continue on your standard residential mortgage.
Often though, lenders told Which? that they would need to be informed:
For in-demand tourist destinations, Airbnb can seem like an attractive alternative to a buy-to-let property - depending on the location, you could equal or outstrip the rent you would receive from a normal tenancy agreement by letting the property on a week-by-week basis.
But few high-street lenders are open toapproving a mortgage for an Airbnb let. Which? asked lenders if they offered a standard product that would allow a property to be used primarily for Airbnb:
Mortgage arrangements aren't your only consideration when listing on a home-sharing site - local councils may also have restrictions in place. In Greater London, Airbnb systems automatically prevent properties from being booked for longer than 90 days, in line with location planning restrictions.
Home insurance is also a potential issue. If a property isoccupied by anyone other than your immediate family, your home insurance cover may be void - it's worth checking the terms and conditions before taking in paying guests.
Airbnb offers Host Protection Insurance but urges that this cannot replace home and contents cover.
A spokesperson for Airbnb said hosts were encouraged to check all relevant regulations: 'We remind hosts to check permissions and follow local rules before they list their space and throughout the year.
'We also share helpful information and links to official guidance on our responsible hosting page. We want to work with everyone to support regular people who share their homes to help pay the bills.'
If you want to list your property on Airbnb, it pays to check your mortgage terms and conditions first, as well as any local regulations - and if in doubt, seek clarity from your lender. While lenders were able to tell Which? broadly what their policies are, your individual circumstances may vary.
David Blake from Which? Mortgage Advisers said: 'Lenders are starting to become a little more open to the idea of short term letting for a period of time and some lenders can offer residential mortgages with consent to let from the outset.
'As always when someone is looking to buy a property for mixed use, I suggest speaking to an independent mortgage adviser to understand your options.