Can I rent my house on Airbnb if i have a mortgage?

Airbnb is big business here in the UK and for good reason. The platform is a useful tool for guests that want to book short stays that are a little outside the realm of a standard hotel. Hosting on Airbnb is a great way for hosts to make extra money with their property. But there are issues to consider before you start. Factors such as getting an Airbnb mortgage aren't always straightforward.

Not every mortgage is equal. Some may have terms that limit your ability to let your property out as a short stay. To reduce hassle and make things as smooth as possible, you may need to understand the basics behind host-friendly mortgages before you start your journey.

Please note that the content in this article is considered as a general overview only. It does not constitute financial advice. Speak to a qualified expert if you need help

What type of mortgage do you need for Airbnb?

Traditional mortgage lenders may be hesitant to offer a mortgage if they know the home will be rented to guests, although this may depend on your provider. Some contracts stipulate you can't do this without acquiring consent to let. Read your existing contract to see what your current standing is before committing to Airbnb.

Freehold vs leasehold properties are also a consideration. Assuming your mortgage provider is okay with this and there are no restrictions written into the property's deeds, those that own freeholds may have more freedom to do as they please absent any other laws or restrictions. If you have a leasehold property, the leaseholder may prevent you from operating an Airbnb unless you get their permission if this is written into the leasehold contract. Pressing ahead and listing a home without consent could potentially cause issues.

Some lenders may allow hosting but place restrictions. In others may just outright refuse, which may require you to switch to a different lender if possible.

Some people that want to host on a more professional level may to buy a second property to do this. This may involve financing the property with a specific mortgage for this type of home, such as a holiday let mortgage.

Holiday let mortgages are designed for short-stay properties and may have different criteria to a standard mortgage.

Do you need a buy to let mortgage for Airbnb?

Buy to let mortgages are popular in the UK for generating a second income or investing in property. However, don't assume that Airbnb rentals are automatically covered by these types of mortgages. If you have a tennant but also want to list it on Airbnb, you'll also need to seek permission to do this. Like a residental mortgage, your provider may place hosting restrictions or refuse to allow this type of activity.

Can you use Airbnb income to qualify for a mortgage?

Some existing property owners may want to use their Airbnb income to fund a second mortgage on another property. If you can show regular earnings, the lender may assess this when looking into your affordability.

Lenders may want to see a stable source of income rather than sporadic earnings.

How to get Airbnb friendly mortgages in the UK

If you already have a mortgage, check the terms of your contract and seek consent from your mortgage provider in writing if unsure. If your provider is not willing to cover you, you may want to understand if there are any penalities for switching provider if this is something you want to do.

For new mortgages, some lenders do cover properties used for hosting, although this may depend on specific criteria. Speak to a expert if unsure.

Protecting yourself with insurance

As with any venture related to additional earnings, operating an Airbnb can be a tricky financial affair if things go wrong. Not only could repairing a property be costly, a mortgage provider may require insurance as one of the terms for providing a loan.

Pikl's UK Airbnb insurance cover protects hosts that rent out their property on Airbnb and similar platforms. If you have any queries about insurance, get in touch with a member of the Pikl team.