Air BNB – Breach of BTL mortgage conditions

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The success of Airbnb has highlighted the demand for short-term lets, but many buy to let mortgage lenders do not allow rental agreements of less than six months, as was discussed in a MortgageStrategy.co.uk article from October 2016.

Landlords who are finding it difficult to find long-term tenants may be tempted to use agencies such as Airbnb, Homeaway and TripAdvisor Holiday to supply short-term tenants . Most buy-to-let mortgage lenders see these short-term lets as risky and consider such arrangements to be in breach of their terms and conditions.

Some buy-to-let mortgages allow holiday and short-term lets, but most will not recognise Airbnb as a legitimate agent that finds the tenants.

A very small number of lenders are now allowing Airbnb tenants to occupy buy-to-let properties that are being purchased with their commercial mortgages. Thanks to Airbnb’s growth, more could follow.

Landlords that ignore the restrictions on short-term tenancies risk a credit black mark and could also find that their insurance is invalid.

Although rents are generally higher for Airbnb than long-term rents, the overall return by using just Arbnb will depend on occupancy rates. Maintenance costs may be high as temporary tenants may not take as much care of the property as long-term tenants who are more likely to regard the accommodation as their home.

If more landlords rely on Airbnb to fill their properties, then this could have a negative effect on the availability of long-term rented accommodation.

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