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What mortgage lenders think of AirBnB


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Hi there, I'm fairly property obsessed. I work for a mortgage broker, I own a house in Camber which I am renovating with a view to it becoming a holiday let, and I live in rented accommodation. I'm interested in learning more about property from all angles. I thought I'd start by sharing a blog written by a colleague on what mortgage lenders think of sites like AirBnB and how you could be breaching the terms of your mortgage contract... 

It can be read here: http://www.mortgagesforbusiness.co.uk/news-insight/2016/december-2016/mortgages-and-airbnb-1/

 

 

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Hi Jenny

 

Thanks for sharing the article, which I have social-shared and agree that it's an important topic.

 

The article talks of residential and BTL mortgages, but what about commercial lenders such as Shawbrook and Cambridge & Counties? Also, are you aware of any lenders that would potentially allow permission if sought despite the terms and conditions, in a similar way to consent to let for resi mortgages?

 

Thanks

Richard

Richard W J Brown a.k.a. The Property Voice

Property Investment Strategist

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The blog was written to address residential and BTL mortgages only. My guess is that a commercial mortgage for an established holiday let business would be different, as AirBnB (and similar sites) might purely be seen as just one of a number of different advertising channels. I do know that AirBnB is on the radar of all mortgage lenders, no doubt we'll get some new policies from them in due course. It will be interesting to see how they value these properties and assess potential income from the properties which, these days, can be instantly affect by bad reviews. 

 

I'm watching closely. From a commercial perspective, I'm pretty sure that the likes of Shawbrook and C&C would underwrite on a case-by-case basis. I haven't heard of any lender granting permission despite T&Cs. Has anyone?

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  • 3 months later...

Very interesting post and blog Jenny,

 

As an Airbnb host I've found it particularly difficult to find information with regard to mortgages and regulation.  Holiday letting appears generally unregulated although of course you have a duty of care.  I basically treat my holiday lets as if they were regulated, for safety and peace of mind. There are a couple of articles I've linked to below which are good from a general perspective.

 

https://www.yourpartnerinproperty.co.uk/wp-content/uploads/2016/03/Regulations-for-Short-Stay-Property-Mar-20161.pdf

 

https://www.towergateinsurance.co.uk/commercial-property/guide-to-short-stay-letting

 

With regard to mortgages, I have a specific holiday let mortgage from Leeds on my flat that I rent out solely on Airbnb.  They just used a surveyor's estimated AST monthly rental to stress test and calculate loan amount as I was moving from AST to holiday let. I think more lenders will come into the market now as more people jump to holiday lets with Airbnb / Booking.com providing easy to use platforms, city breaks becoming ever more popular (from my point of view) and new tax rules making traditional BTL outwith limited companies more penalising. The product is a max 70% LTV but still a competitive rate.

 

I think there needs to be more leeway for renting a room, this has been done for decades but with Airbnb it's becoming more popular and more short term. I believe that most people carrying out Airbnb or even having a lodger have not told their mortgage provider. I wonder if there will be a crackdown and how this would be implemented.

 

Would be great to see an updated blog from your colleague with all the lenders named and what their views were.

 

Also Richard's question on whether a BTL or residential would allow 'consent to holiday let' is a good one?

 

How are you getting on with your holiday let? It's coming into busy season again here in Edinburgh... :)

 

Ollie

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  • 2 months later...

Hi Ollie, I've asked my colleague to update their blog. Will post as soon as it's up. To be honest we've not heard much more from lenders on the topic. I guess over time they'll all catch up...

 

My holiday let is now up and running. My husband is dealing with the day to day stuff but so far it's going well. I've not had much success with AirBnB yet because I haven't got any reviews, so it's a bit of a catch 22 situation and I'm reluctant to get friends to book, review and refund them the money - it feels dishonest, although I do know people who have done that. However we're on Owners Direct which has been pretty good so far although their commission is high. Will probably switch over to the one-off payment option at some point but get the feeling that their marketing is better if you go for the more expensive, commission route. Do you have any experience of this?

 

I've also had a booking directly from my website, which I've only just finished setting up, so at least Google has picked it up properly.  (It's a Wordpress site - which takes a while to understand - v. frustrating). Today I set up a Facebook page for it too and got all my friends to like and share it. I'm guessing you do all of these things plus other social media? (that I'll get around to doing as well at some point). Can you send me a link to your holiday let - I might learn a few things!! Thanks

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  • 2 months later...
On ‎22‎/‎05‎/‎2017 at 5:19 PM, jenny barrett said:

Hi Ollie, I've asked my colleague to update their blog. Will post as soon as it's up. To be honest we've not heard much more from lenders on the topic. I guess over time they'll all catch up...

 

My holiday let is now up and running. My husband is dealing with the day to day stuff but so far it's going well. I've not had much success with AirBnB yet because I haven't got any reviews, so it's a bit of a catch 22 situation and I'm reluctant to get friends to book, review and refund them the money - it feels dishonest, although I do know people who have done that. However we're on Owners Direct which has been pretty good so far although their commission is high. Will probably switch over to the one-off payment option at some point but get the feeling that their marketing is better if you go for the more expensive, commission route. Do you have any experience of this?

 

I've also had a booking directly from my website, which I've only just finished setting up, so at least Google has picked it up properly.  (It's a Wordpress site - which takes a while to understand - v. frustrating). Today I set up a Facebook page for it too and got all my friends to like and share it. I'm guessing you do all of these things plus other social media? (that I'll get around to doing as well at some point). Can you send me a link to your holiday let - I might learn a few things!! Thanks

 

Oh dear Jenny, I'm late at replying...

 

Here's my listing here http://abnb.me/EVmg/Bmc84CV9fF that's the whole apartment and I do my spare room also which you'll see by going to my profile.

 

You go in cheap for a few Airbnb stays to get stays and reviews then put your price up. I've heard owner's direct is good (looking at a holiday let on the islands which I may consider that for). I do zero social media (this probably is the first for my share :D ), I'm solely Airbnb and work colleagues / neighbours.  It's funny I thought neighbours would disapprove of me doing it but I end up putting up their family and friends :)

 

I provide a detailed guest book in each apartment and also a map and directions pre sent as pdf.  It's good to have a pack of info as it greatly reduces questions.

 

Anything else you want to ask I'll promise to improve on my response time ;) 

 

Ollie

 

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