Beverley Morris and Co. Latest News News To Airbnb or not to Airbnb

The rise in popularity of websites such as Airbnb is sweeping the globe, allowing the ordinary man or woman to let out his or her spare room on a short term basis for some extra income. Whilst this might be seen as a step forward in the “sharing economy” in which we now live, others believe there are negative effects on our society. One concern, for example, is that such websites are compounding the housing crisis by making fewer homes available for affordable housing.

Whilst lettings for no more than 90 days in any year are allowed without the need for planning permission, if you are thinking about letting out your home you will also need to comply with all legislation applicable to lettings of residential property including having gas and electrical safety certificates in place. You should also check your insurance policy as some contain exclusions for short term lettings.

There are further points to consider depending on your interest in the property:

  1. Freeholder

    As a freeholder, you should check whether there are any covenants in your title deeds that restrict short term lettings. If you have a mortgage, you need to check whether your lender allows short term lettings. It might be that you will need your lender’s consent. Buy-to-let mortgages will usually require that any tenancy is granted for no less than six months by way of an assured shorthold tenancy.

  2. Leaseholder

    In addition to checking whether there are any covenants preventing short term lettings and whether such lettings are permitted under your mortgage, you need to check your lease. Leases will often prohibit you from letting part of your property and there might be a restriction on the permitted use of the property. In a recent case the lease only allowed the property to be used as a ‘private residence’ and the tribunal ruled that this clause of the lease had been breached because the short term letting amounted to a ‘business use’ and not a ‘private residence’.

  3. Tenant under a tenancy agreement

    Generally, most assured shorthold tenancy agreements will prohibit the subletting of the whole or any part of the property without the prior written consent of the landlord. Breaching this would leave the landlord open to seeking possession of the property.

Whatever your views are, be sure to consider the legal issues before letting out your home.