Are Airbnb Mortgages Really Different?

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    If you’re planning to rent out your home as a holiday let, the ever-popular platform Airbnb might well be a tempting option for marketing it to potential guests. Whether you’re planning to rent the entire property or just a single room, it’s a great way to generate income. The question is, is there a specific mortgage you need which allows you to use Airbnb? The short answer is, yes! Read on to discover everything you need to know about Airbnb mortgages. 

    What type of mortgage do I need?

    Since Airbnb is geared around holiday lettings, a regular residential or buy-to-let mortgage normally won’t allow you to substantially use Airbnb (or any other holiday letting activity); for this you will need a holiday let mortgage. If you already own the property and have a regular mortgage in place, you must let your mortgage lender aware of your plans. If you don’t and rent out your property on Airbnb, you will most likely be breaching your mortgage contract.

    It is true that some mortgage lenders, such as Metro Bank or Barclays, allow occasional/temporary letting for a small number of days throughout the year, such as 90 days per annum, with their regular residential mortgage offerings. In this case, your property would not meet the requirements needed to classify as a professional furnished holiday let (FHL), which can reap great tax benefits.

    Do all holiday let mortgage lenders allow me to use Airbnb?

    Unfortunately, no! Although in our opinion, it seems illogical, some mortgage lenders view Airbnb as less ‘legitimate’ than other marketing websites. Although essentially, Airbnb is no different to platforms such as, Expedia and Trip Advisor, its popularity and success has led to a great amount of publicity, including negative stories in the media. There’s nothing better for newspapers than a sensationalist headline such as “Airbnb apartment was a secret drug den!”

    As a result, some holiday let mortgage providers will view Airbnb as too big a risk to lend to. However, in our experience, Airbnb is no better or worse than its competitors, and so should not be treated any differently. We can help you in finding those lenders which do allow for Airbnb, saving you from a long and frustrating search.

     I am buying a holiday let and I wish to use Airbnb for marketing. Will a lender accept this?

    The majority of mortgage lenders prefer to see new holiday homes marketed by professional letting agents. This could be national companies such as Holiday Cottages, or perhaps more local agencies who operate in a specific territory, like Perfect Stays.

    In our experience, although the agent route appears to be the most expensive, it is the most sensible option in the first instance. Professional agents have extensive marketing experience and so using them to promote your holiday home will typically result in the largest reach. For more information, see our business model for holiday lets here.

    As a result, mortgage lenders will view their loan as much less of a risk should you go with a holiday letting agent, as they will surely help you to generate more bookings and income, especially at the start while you find your feet in the saturated market.

    I wish to re-mortgage my holiday home and use Airbnb. Will that be OK?

    Generally, yes! You will need to provide your mortgage lender with financial information about the last 12 months of bookings. This would include the dates that guests stayed, the gross amount you charged to the customer and the net amount which you received. You will have to match this information to bank statements, so that the lender has proof, and can clearly see that you are able to generate income and make your monthly mortgage payments.

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    How can we help?

    An online search for “mortgage provider who will allow Airbnb” will no doubt be arduous! Especially considering it isn’t something that lenders will necessarily advertise initially; you might have to make contact to ask the question, wait for a reply, and so on – all of which is a hassle you don’t need.

    With our expert understanding of lenders, we can do the job for you, scouting out the holiday let mortgage providers who will allow you to market your holiday home on Airbnb.

    For more information, contact us or create an account and request your free, initial assessment, here.

    Andy Soye Profile Photo

    Andy Soye

    Founder @ Holiday Cottage Mortgages
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      FCA disclaimer

      The information contained in this article is accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time and so please speak to one of our Consultants to confirm the most accurate up to date information. Nothing in this article constitutes financial advice. You understand that by clicking any external links on this page that you will be leaving the website of Holiday Cottage Mortgages and we cannot be held responsible for the content of this external website. Please always consult your accountant or solicitor for all financial, taxation or legal matters.