A question we get asked from time-to-time, and one I have advised some friends on, is about letting out their house. They are buying the property, and want to let it out, and possibly buy another property, or in the instance of a friend of mine, she decided to do the Airbnb thing with her flat, and move in with her partner.
I know in writing this, many people are going to disagree with what I will say/write here, but the facts are the facts, and liability is liability.
Technically….you cannot just let your property out, mostly due to the fact if you have a mortgage, and the whole Airbnb thing brings up even more issues. And I will explain.
There are two things that must be addressed here:
The mortgage itself
To break this down and go into detail, when you bought your property it was probably an owner occupied mortgage, not a buy-to-let mortgage. What this means is that you the owner also occupy the property.
You did not originally buy the property as an investment to let out.
Your mortgage was granted on the basis you were going to live there. You move out and let the property out, you are no longer within the terms of the mortgage.
The same with the building and contents insurance. The policies were based on you as the owner living in the property. As soon as you move out and let the property out, the insurer could deny any claims.
One exception to this rule can be taking in a lodger, notice I said lodger….not lodgers. We will address that later.
Most mortgage companies and insurers are OK with taking in a lodger. You always still need to query this with the mortgage lender and insurer, but most are OK with this. It is almost like having your partner or spouse move in with you. Most lenders and insurers are fine with this, but it is always best to advise them.
HMO’s/House of Multiple Occupancy or in Occupation
Here is where matters change, when you take in multiple lodgers, or use the property as an HMO. There are specific insurance requirements, and also requirements from the local Council regarding this.
In most instances a license may be required. It also changes how you can insure the property.
So you want to let your property out as an Airbnb….this is where is can get complicated.
Some mortgage companies will allow you to do this for a set period of time each year, so you need to inquire with your mortgage company.
From an insurance standpoint, it also gets complicated. There are liability issues that need to be addressed, and also any damages that may occur. Again, you need to inquire with the insurer to clarify their position on this.
There can also be some local Council rules or laws on doing the whole Airbnb thing.