Airbnb Buy To Let Mortgages are coming
Savvy homeowners in Prime locations are starting to realise that they can rent out their homes to the seasoned traveller and receive a higher rental income. It makes financial sense, turnover is good (as the Airbnb travel hype continues to rise) and you are not tying your property up in a 12-month contract.
However, mortgage lenders don’t see it that way. Most high street lenders are saying firmly ‘No’ to even the thought of Airbnb rentals – and to defy your lender would mean breaching your mortgage conditions.
Here at Glow, we like to be at the forefront of new releases, whether that be technology or mortgage products. So we were excited to hear rumblings that some of the smaller mortgage lenders want a piece of the Airbnb pie.
The goal is to beat the high street lenders to market with new and revolutionary mortgage products. Smaller lenders aren’t afraid to dip their toes into unchartered waters, this time by offering mortgages suitable for Airbnb Buy to Let rentals.
How will Airbnb mortgages work?
Buy to Let mortgages at the moment are not that flexible, certainly not flexible enough to the extent of how Airbnb rentals work. Buy to Let mortgage lenders require that any rental agreement on your property is covered by an AST (Assured Shorthold Tenancy agreement). This type of agreement protects the rights and interests of both the landlord and the tenant.
Whilst a necessary requirement for long-term lets, these types of rental agreements would be a bit much to ask a holidaymaker to sign who has just arrived not so fresh off the plane from a far-flung location. It also defeats the point of Airbnb.
So if mortgage lenders want to get involved in this niche and profitable buy to let area, they are going to have to relax their criteria with regard to the requirement for an AST. This means that lenders offering Airbnb mortgages would not be requiring a signed AST rental agreement.
Airbnb Mortgage Lenders
At the time of writing we have access to a pilot Airbnb mortgage product. We cannot publicise the lender details, but we can certainly help you if you own a property in a Prime Location with an existing buy to let mortgage and you are looking to change lender in order to pursue a more profitable Airbnb rental strategy. As always, we will not charge a broker fee for arranging your Airbnb mortgage.
Author: Ben, Glow Mortgage Advisor (CeMAP, BSc Hons)
Date Published: 3rd July 2018.