Using a service like Airbnb can help to simplify managing a short-term let, but make sure this option is suitable for you and your flat.
Airbnb is a strong contender in the home sharing market, having evolved from the idea of letting a spare room to offering a whole home. It has also expanded to offer longer term weekly and monthly stays. But is it the right solution for flat owners?
Your flat may be a second home or property investment that you want to let out on a regular basis. Or it might be your permanent home with a spare room available for the odd week or weekend to make some extra income.
Is short-term letting allowed in your block of flats?
You should check whether you are allowed to let the flat on a short-term basis at all. Increasingly, leases are being written or amended to prohibit short-term Airbnb lets. Often landlords and other leasehold residents don’t want strangers coming and going from the building, so they restrict sub-letting to more stable Assured Shorthold Tenancies of six months or more. Some leases prohibit any sub-letting at all.
In greater London homes are restricted from being used as short-term lets for more than 90 nights per year unless they have planning permission. London is currently the only UK city to have such a cap, but there is no guarantee that other cities will not follow suit. In Edinburgh, planning permission is required to use second homes for short-term letting.
Does your mortgage permit letting?
Check with your mortgage lender, as letting out the property may breach your mortgage terms. There are lenders who offer residential mortgages that allow for Airbnb-style short lets for a total of up to 90 days, but that might only suit you if you wanted to let out your own home. For year-round ‘professional’ Airbnb letting, a mortgage specifically designed for holiday lets might be needed. This is not the same as a buy-to-let mortgage where lets are assured shorthold tenancies (ASTs) so be sure to speak to your lender if you want to switch from ASTs to short-term letting, and vice versa.
Does block of flats insurance cover Airbnb lets?
You also need to consider insurance as insurers may treat the risk as a holiday let.
This could mean higher premiums and increased restrictions. Not declaring your letting plans to your insurer could result in claims being refused and your insurance being invalidated.
In a block of flats, this could affect the whole block and you must let whoever arranges the insurance know so they can advise the buildings insurance providers. If you have a separate contents insurance policy, that should also be checked.
It should be noted that Airbnb provides AirCover for hosts, including damage protection, but be aware they state that it isn’t an insurance policy and not all damage is included within its terms.
A short-term lettings portal such as Airbnb can be easy to use for both visitors and owners. Used sensibly, they can continue to help us visit new places and make some money from our homes. Just remember that if you are letting a flat, short or longer term, you have obligations to the freeholder and other residents to ensure that the covenants on your lease are kept.
Blocks of Flats Insurance from Gallagher
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The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.
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