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One in four homes let through Airbnb in some UK areas

One in four properties are listed as an Airbnb in some parts of the country, amid concerns the short-term lets are deepening the UK’s housing crisis.

In Edinburgh Old Town there were 29 active listings for every 100 properties, while in the north-west Skye, there were 25 listings for every 100 properties.

The analysis by The Guardian found that in England, the highest rate of Airbnb lets were in Woolacombe, Georgeham and Croyde in Devon, where there were 23 listings for every 100 properties.

The findings underline concerns that short-term lets are taking away from longer-term lets, or permanent homes.

It also comes as landlords are warned about breaking the terms of their buy-to-let mortgages by using their properties for Airbnb or other similar services.

Thousands of properties lost

Recent research by ARLA Propertymark found that around 50,000 properties are unavailable for long-term tenants, as landlord switch to short-term lets.

The number of active listings on Airbnb in the UK increased by a third to 223,000 in 2018 from 168,000 in 2017, the study produced with Capital Economics showed.

Burdensome legislation on landlords renting to long-term tenants were part of the reason driving the change, the trade body said.

Independent councillor in St Ives, Cornwall, Andrew Mitchell told The Guardian he is worried about the lack of regulation on holiday lets through Airbnb.

He said: “All those B&B owners and small hoteliers are having to pay £5,000 to £10,000 for a fire alarm system, £500-£1,000 a year for refuge collection, so there’s a bit of resentment from those operators that there isn’t a level playing field.”

Airbnb has been approached for comment.

Written by: Lana Clements

Source: Your Money

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Brokers call for innovation around short-term lets

More landlords are looking at short-term and holiday lets and lenders have to match this interest with more innovation, brokers have claimed.

Andrew Montlake, director at Coreco, said few lenders would place holiday let cases, but Airbnb is a bit more complex and lenders are more selective.

He added other than rates, it’s location and short-term lets that landlords are looking for.

Montlake said: “There has to be more innovation around Airbnb and how lenders deal with that because that’s something a lot of portfolio landlords are doing with at least part of their portfolio.”

Michael Lawlor, business principal of Mortgage Advice Bureau in Finchley, added: “We’re getting more of these enquires, they’re very difficult to place and we’d like to see more options for landlords.

“I’m getting more enquiries for Airbnb than I’ve ever had so it’d be great if some other lenders joined that market to give more option to our clients.”

Adam Kasamun, associate director at LDNfinance, said if there are restrictions saying it has to be a holiday let then many lenders will not do it.

He said: “I think for people (landlords) to diversify they have to be able to take risks as well.

“HMO can be quite risky and there is a lot of regulation around it and with holiday lets, not many people want to do it.

“Airbnb, we know about that. It’s about maybe landlords being ahead of the curve.

“The limited company thing is a lot more mainstream than it was four, five years ago.

“More people are aware of it but the people who did it four, five years ago are seeing the benefits of it now because they were ahead of it. Do it now and you can make more from it.”

Jeff Knight, director of marketing at Foundation Home Loans, said that Foundation underwriters short-term let buy-to-lets in the same way as normal buy-to-let cases.

He added: “The only difference is that we do not ask for an AST (Assured Short Term Tenancy Agreement).

“By underwriting these in the same way gives the landlord the flexibility to revert to normal letting should they require to do so, giving fair customer outcomes.

“Having undertaken some landlord focus groups recently, I can say that this market will grow, albeit it will still be very much a niche area, as it gives portfolio landlords in particular opportunities to diversify their portfolios.”

By Michael Lloyd

Source: Mortgage Introducer

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Short-term lets are here for the long haul

Landlords on the lookout for greater returns are turning to short-term lets – and they need mortgages.

There’s no question that Airbnb has disrupted the travel accommodation market in the last decade since launch.

But its impact has reached further, to UK landlords, many of whom are rejigging their buy-to-let portfolio to accommodate short-term lets.

There’s just one problem.

Buy-to-let mortgages usually exclude short-term lets, because lenders have historically found them complicated and risky.

Now the market is catching up.

Specialist lenders, such as Foundation, and some smaller mutuals have recognised the demand for mortgages that allow landlords to let their property on short-term contracts using online marketplaces such as Airbnb.

Yield of dreams

Experienced landlords have started to look for greater returns in niche sub-sectors of the market. These include HMOs, purpose-built student accommodation and increasingly short-term lets.

It’s easy to see the appeal from a landlord’s perspective. In a sector dealing with a series of costly changes, the lure of higher returns has tempted many to move from assured shorthold tenancies (ASTs) to the higher stakes of short-term lets.

Landlords can potentially double their money or more when it comes the rental income they can command, with cities such as London, Manchester and Edinburgh seeing a boom in apartment lets.

And it’s not just holidaymakers and weekend party-goers. Those between properties and businesses are also looking for the flexibility of a short-term let with no strings attached and no bills to pay.

Taxed off

The Residential Landlords Association found that 7% of landlords are now moving their properties from long-term to short-term lets, and over a third claimed that changes to tax relief on property finance prompted the shift.

That’s because furnished holiday lets are treated as businesses, not investments, and taxed differently, effectively escaping the dreaded ‘turnover tax’. The property could also qualify for entrepreneurs tax relief, plus you can claim the cost of furnishing the property.

But it’s not all high rent and tax benefits.

There’s utility, cleaning and admin costs to factor in and a greater risk of voids and of property damage, plus some areas could find that demand is highly seasonal.

What about mortgages?

Buy-to-let lenders prefer the security of a tenant on an AST than an ever-revolving door of visitors, and don’t usually accept short-term lets.

As a result, this is still a niche sector, served by a handful of lenders, including Foundation.

Lending criteria still varies significantly, so it’s a smart move to have a good grounding in what is currently offered.

For example, some lenders require the landlord to have personal income to cover the mortgage for a period, while Foundation has no minimum income requirement.

Some have specific affordability criteria, while we underwrite short-term lets as a standard buy-to-let mortgage. Plus, we will lend to limited companies as well as individuals.

Lenders need to be flexible because the buy-to-let sector is changing, and never more so than in the last few tumultuous years.

Landlords are already using Airbnb and other sites to let their properties, with some potentially breaking their mortgage contract and voiding their buildings cover.

The demand for short-term lets is growing and online accommodation marketplaces are not suddenly going to disappear – Airbnb currently has five million listings worldwide.

Do we bury our head in the sand or give landlords mortgages that meet their needs today?

Source: Mortgage Introducer