Welcome … but the consequence of opening your door to Airbnb guests could be worse than you thought. Photograph: Alamy
sábado, 2 de abril de 2016
Beware the Airbnb guests who could end up costing you your home
The rise in popularity of sites such as Airbnb has been incredible, but renting out your house is likely to be a breach of your mortgage terms, meaning charges or rate rises – or worse
Saturday 2 April 2016 06.59 BST
It was one of the budget’s most eye-catching giveaways: a tax break for people who use websites such as Airbnb to rent out their home. But a Guardian Money investigation has found that many people who might be considering hosting Airbnb guests in the wake of George Osborne’s announcement could land themselves in a whole heap of trouble with their mortgage lender.
We found that in some cases borrowers might be hit with a fee or face a higher mortgage rate. In others, the consequences could be far more severe, with some homeowners potentially risking a demand for the immediate repayment of the whole mortgage or even, in theory at least, being threatened with repossession.
That was the message from banks, building societies and property experts this week after Money checked the small print of mortgage contracts issued by the 18 biggest lenders in the UK. We also sought legal advice on the typical rights of leaseholders and tenants when it comes to hosting Airbnb guests.
The popularity of sites such as Airbnb, which enables you to offer paying guests temporary accommodation in your home for short periods, has risen sharply in recent years, and in his March budget the chancellor announced that the first £1,000 of income earned in this way will be tax free from April 2017.
It’s the second tax break which will benefit such “landlords”, following on from the increase in the “rent-a-room” allowance (which allows you to rent a room in your home to a lodger) from £4,250 to £7,500 a year that takes effect from next week.
Our findings suggest the big winners are likely to be the “property elite”: older homeowners, many well-off, who own their homes outright. But some might wonder whether a lender would really find out if a mortgage holder had paying guests staying every now and again? Should you just do it anyway and hope for the best? And what if you only want to rent out a room?
What the lenders told us
Without consent, any Airbnb host with a mortgage is likely to find themselves in breach of their home loan contract.
Customers with Bank of Ireland, Barclays, the Co-op, Clydesdale bank, Coventry building society, Halifax, HSBC, Lloyds bank, Leeds building society, Metro bank, Nationwide, the Post Office, Royal Bank of Scotland/NatWest, Santander, Skipton building society, Virgin Money, Yorkshire building society and Yorkshire bank who let out their property on Airbnb (or a similar site) without consent are breaching the terms of their contract. The Council of Mortgage Lenders (CML) says it is likely that all owner-occupiers will find a clause in their paperwork preventing the letting of the property on any basis without prior consent.
If you do seek permission for a short-term rental of your entire home – for example, when you are going on holiday for a week – the Co-op, Clydesdale bank, Yorkshire bank, the Bank of Ireland, the Post Office, RBS and Virgin Money would not allow it. Neither would Nationwide on a primary residence.
Santander and TSB said they might allow it, depending on your situation, although Santander would charge a £295 fee for each consent period. Other lenders also said requests would be decided on a case-by-case basis, but most are unlikely to give their consent, according to the CML. Spokeswoman Sue Anderson says: “It’s possible some lenders may allow some occasional ad hoc use on an exceptional basis in individual circumstances.”
However, she adds, most lenders do not allow borrowers to offer short-term lets, whether they are owner-occupiers or on a buy-to-let mortgage.
Ray Boulger of broker firm John Charcol says that as a general rule, most lenders, if asked, would say no. A notable exception is Market Harborough building society, which openly states it will allow Airbnb hosting for up to 24 weeks a year if you seek consent. But this could increase your mortgage rate. New applicants should expect to pay a variable rate of 3.99% – around two percentage points higher than the best buys available on the market.
For many, renting out your entire home is the whole point of joining a site such as Airbnb. But what if you only want to rent part of it – for example, just one room? Again, Market Harborough will allow this, subject to a potential increase in the mortgage rate.
Nationwide says it will consider allowing renting out a room “on bed and breakfast terms”, provided no more than two bedrooms are allocated to paying guests and the home insurer has been informed.
TSB, Santander and RBS said that in general they would be open to the idea of Airbnb if a borrower wanted to rent out a room, but stressed consent would depend on the merits of each case. RBS said there would be a £100 fee.
Other borrowers may struggle. “Airbnb is a relatively new phenomenon, so most lenders don’t have a strict policy aimed at temporary paying guests,” says Pete Mugleston of OnlineMortgageAdvisor. “Some lenders don’t allow them, and most only allow longer-term lets. If you ask – and you have to – it will usually be a no to Airbnb.”
David Hollingworth at mortgage broker London & Country adds: “If your lender does agree, it may require your guest to sign a consent form which acknowledges the rights of the lender. This is unlikely to be a practical option for a few days’ rental at short notice.”
Carrying on without consent
If you ask your lender and they say ‘no’ you can’t plead ignorance if they find out …refinance rather than going ahead
“If you ask your lender and they say ‘no’, you can’t then plead ignorance if they find out,” says Mugleston. “That’s not to say you shouldn’t seek consent, but if you are declined, you should refinance to a lender that allows it, rather than going ahead.”
Could a lender find out if you didn’t tell them? Simon Checkley at broker Private Finance says lenders have internal monitoring teams able to perform checks to determine whether you are living in the property or renting it out.
However, none of the lenders we contacted said they check Airbnb to try to find out if borrowers were letting their property on the site without permission, and the CML says most lenders are unlikely to check proactively on their entire loan book. “Lenders can look at a website as easily as anyone else, but most will have better things to do,” Checkley says.
If your bank or building society does discover you are hosting on Airbnb without its consent, the CML says it could seek immediate repayment of the total mortgage under the terms and conditions of the contract.
Clydesdale and Yorkshire banks, for example, say letting on Airbnb without consent “ultimately could result in the mortgage being recalled”, adding that “this is likely to be a last resort”.
Boulger agrees that such a move would be extreme: “As long as mortgage payments are up to date, there is no way they would do that, and so a lesser penalty, along the lines of a rate increase or a fee, would be more likely.”
Yorkshire building society, for example, confirms that an unauthorised letting on Airbnb could potentially lead to a mortgage rate increase of 1.15%. However, this would only be due for the short periods you had let the property.
Lenders may prefer to initially give you a warning. “I suspect that in practice, if a lender discovered an historic breach it would write reminding its customer of the terms of their mortgage and spell out the need to get permission if they want to use Airbnb or a similar site in the future,” says Boulger. “If the borrower wanted to do that, charging an admin fee to regularise and authorise future lettings, rather than increasing the rate, is I think the most likely lender response.”
The CML warns: “It would clearly be a dishonest and risky strategy on the part of borrowers to proceed knowingly [on Airbnb] without talking to their lender.”
The CML says lenders are concerned about the risks involved with a short-term let. “What if the borrower moves out and expects to gain an income from regular short-term lets that do not materialise? What if a short-term let results in a bad experience where the tenant severely damages the property or even destroys it?” asks Sue Anderson.
In this situation Airbnb hosts would probably rely on the website’s “host guarantee” which covers any damage caused by the guest during the rental period, up to £600,000. But the CML stresses that lenders require borrowers to have buildings insurance, and that policies may not cover a property that is being let on a short-term basis.
“Anyone who hosts a property on Airbnb could invalidate their buildings and home contents insurance policy if they fail to inform their insurer in advance about their paying guests,” says Ben Wilson of Gocompare.com. “As a result, insurers may decline a claim – even if the claim occurs after the guests have left and is unrelated to any aspect of their stay. It’s also worth noting that such a claim would not be covered by Airbnb’s £600,000 host guarantee, since it was not during the rental period.”
The Association of British Insurers (ABI) says insurers are becoming more aware of the needs of Airbnb hosts, so it is quite possible you will be fully covered if you do inform your insurer about what you are doing.
For example, although LV= and Direct Line will refuse to cover Airbnb usage of your home as a general rule on their standard policies, other insurers including Aviva, Axa and More Th>n say that once informed they will agree to cover occasional Airbnb hostings.
Insurers may, however, apply exclusions for theft (except by forcible or violent entry) and malicious or even accidental damage during the Airbnb rental, in addition to hiking your premiums. If this happens, consider asking a broker such as Towergate, which specialises in insurers happy to cover Airbnb rentals, to find you a better deal. “Hosting on Airbnb is not likely to incur an increase in your premium via a specialist insurer,” says spokeswoman Annie Plaskett. The ABI says insurers do not, in general, insist you inform your mortgage lender if you let out your home, though you should check the wording of your policy carefully.
If properly insured, the legal risks of lending to owners of freehold properties who host on Airbnb are tiny, if there are any at all, say both Howard Dent, a senior lecturer at the Manchester Law School, and Nyree Applegarth, a property litigation partner at Higgs & Sons solicitors.
“The Airbnb guest would not be a tenant because there is no tenancy agreement, just a licence to use the property, and they would not accrue tenancy rights,” says Applegarth. “If they overstayed their welcome they’d be trespassing, and typically, within two weeks, you’d be able to get an expedited court hearing to get the guests out. Lenders should be more relaxed about this.”
Dent agrees: “I don’t know what lenders are afraid of. Perhaps if the borrower stops paying the mortgage it might slightly complicate the job of taking possession of the property if the guest is still staying on. But there’s no possibility of an Airbnb guest’s interest in the property having any priority over the mortgage lender’s.”