New plans mean that London homeowners will be able to let their properties on sites like Airbnb without fear of prosecution.
Communities secretary Eric Pickles has announced that the government will scrap legislation requiring Londoners to seek planning permission if they want to let their property for less than three months.
Under current rules Londoners who do so risk a fine of up to £20,000 – a restriction that caused particular controversy during the 2012 London Olympics.
“The internet is changing the way we work and live,” Mr Pickles said, “and the law needs to catch up” – but is Airbnb also an option for landlords?
Airbnb and landlords
Airbnb has become increasingly popular amongst homeowners who want to let their property on a short-term basis, for example while they are on holiday.
But new research from The Guardian suggests that many of the properties on the controversial site could be owned by buy-to-let landlords.
The Guardian analysed more than 13,000 London Airbnb listings, and found that 6,600 of those were for an entire property, rather than a single room. They also found more than 1,500 users of the site with listings for more than one property.
However, the legal position for landlords letting on Airbnb is complicated – and there is concern that many of those who do so may not understand their obligations.
Airbnb and buy-to-let mortgages
Most standard buy-to-let mortgages will require landlords to let their properties on an Assured Shorthold Tenancy (AST) basis. This is the standard agreement on which most properties in the UK are rented, and they normally have a term of either six or 12 months.
Buy-to-let lenders will generally explicitly forbid short-term lets on properties against which they have given a mortgage. As such, if you have a buy-to-let mortgage you will likely be breaking the terms of your agreement if you let it on a site like Airbnb.
Airbnb and insurance
Although the terms of insurance policies vary, it is important to understand that many landlord insurance policies will also require properties to be let on an AST basis, and will explicitly exclude short-term lets. If you want to let a property on a short-term arrangement, you will probably need to secure dedicated holiday let cover, but you should understand that letting your property like this will likely invalidate your landlord cover.
So is Airbnb right for landlords?
The Guardian research suggests that many landlords are advertising properties on sites like Airbnb. However, it is important that landlords understand that by doing so they may be invalidating their insurance and breaking the terms of their mortgage agreement if they have one. You should therefore treat these sites with caution, and always speak to your lender and insurer in advance.