>Airbnb mortgage rules: you...
Hosts have been welcoming guests into their homes via Airbnb since 2008 and the impact on the UK economy is growing. Last year, for example, Airbnb listings reached 168,000 in the UK and generated an estimated £3.46 billion boost to the economy from a combination of extra income for host households and increased visitor spending in local communities.1While Airbnb has the potential to take a landlord's rental business in a new and exciting direction, there's often initial confusion amongst would-be hosts about whether their existing mortgage covers this type of short term letting.Here, we answer some of the most frequently asked questions on Airbnb mortgages to help landlords get to grips with the facts.

Can landlords use a standard buy-to-let mortgage to finance an Airbnb property?

Landlords should always check with their lender before becoming an Airbnb host to make sure this is allowed under their mortgage conditions. Each lender offers a range of different mortgage products and not all products will allow customers to rent out their property on Airbnb.At Paragon, landlords who want to let out a property on Airbnb will need to apply for a holiday let mortgage.Paragon introduced holiday let mortgages into the product range in November 2018.Importantly, when a landlord applies for a holiday let mortgage with Paragon, they don't specifically have to say that they are intending to use Airbnb but they should have checked first that Airbnb hosting is allowed by their local authority and, if relevant, their freehold agreement.If a landlord has a buy-to-let mortgage or a residential mortgage with another provider, they should also check their mortgage conditions to see if Airbnb letting is allowed. If they're in any doubt, give the lender a call and ask them to clarify the situation. Likewise, if they're searching for a new mortgage product, they should confirm their intentions for the property and clarify whether Airbnb lets are accepted.

What type of information will mortgage lenders want to know?

Again, this will depend on the lender.At Paragon, for example, we'll want to check the proposed property is a single, self-contained unit and that it will be let under an approved holiday occupancy agreement for a maximum period of one month at a time.We'll also want to consider mortgage affordability. One way that landlords can demonstrate affordability is through holiday rental income. However, at Paragon, we'll also want to know that the mortgage would be affordable if the tenancy was let on a standard Assured Shorthold Tenancy (AST).

If Airbnb doesn't work out, can landlords convert their mortgage back to a standard buy-to-let property?

Airbnb won't work out in every case. Higher cleaning and support costs or more frequent voids may mean the economics are not attractive in practice. If this happens, some lenders, including Paragon, allow landlords to revert to letting on a more standard AST.

If Airbnb doesn't work out, can landlords convert their mortgage back to a standard buy-to-let property?

Airbnb won't work out in every case. Higher cleaning and support costs or more frequent voids may mean the economics are not attractive in practice. If this happens, some lenders, including Paragon, allow landlords to revert to letting on a more standard AST.
Information provided by Paragon Mortgages: Other mortgage providers are available. Jackson Property would advise seeking independent advice from the correct parties before letting your property.