Advertisement

How to avoid Airbnb headaches

Short-term lets on Airbnb can be a good way of making spare cash, but make sure you’re covered, says Sarah Moore.

933_MW_P22_Inv-Prop
Don't rely on Airbnb to cover any damage caused by guests

Short-term lets on Airbnb can be a good way of making spare cash, but make sure you're covered.

In a court case last year, a London-based leaseholder was found to have breached the terms of his lease by renting out his flat through the short-term letting site Airbnb. The County Court ultimately decided there had been a breach of the covenants in his lease that said he wouldn't sublet the flat without prior written consent of the landlord, and that he would only use the flat as a residential home for one family.

Advertisement - Article continues below

Although there's decent money to be made from letting out property via Airbnb, the lesson here is clear: to save headaches later on, make sure you first get the okay from everyone with a relevant interest in your property.

You need permission first

As far as mortgage agreements are concerned, different lenders will also take differing approaches. Some say you can't let your house out at all; some will ask you to apply for consent to let in return for a fee; others say they make decisions on a case-by-case basis.

Advertisement
Advertisement - Article continues below

Next, you need to think about your home insurance. Given that you took out buildings or content insurance on the basis that specific people would be living in your home permanently, most insurers are understandably not willing to cover damage caused by someone you found on Airbnb. So letting your property outshort-term may actually invalidate your current policy.

If you do have plans to let out your home on a short-term basis, get in touch with your insurer to see what they say. They may agree to extend the scope of your existing policy, in return for a fee.

Advertisement - Article continues below

If not, you may have to take out a new policy that will allow for short-term lets. In that case, consider going to a specialist broker such as Towergate or HomeProtect. (You can also find a broker via the British Insurance Brokers' Association website.) If you'd rather go directly to an insurer, Admiral, Aviva, Churchill, Direct Line, More Than and Privilege all provide cover for renting out a room (although not all will cover renting out a whole house), says consumer-finance site Money Saving Expert.

But will Airbnb come to your rescue?

But although this all sounds good, and you're unlikely to experience an Airbnb horror story along the lines of a house destroyed by an overly enthusiastic party, it's not necessarily a good idea to rely on the company to bail you out. There have been stories of severe damage that it has refused to pay for, so you may want to take your own precautions with insurance.

Advertisement
Advertisement

Recommended

UK house prices go into a gentle decline
House prices

UK house prices go into a gentle decline

Halifax’s house price index shows that UK house prices declined for the fourth month in a row in June.
9 Jul 2020
House price crash: UK property prices are falling – so where next?
Property

House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020
What’s a better bet right now: a house in the UK or gold?
Gold

What’s a better bet right now: a house in the UK or gold?

Measured in ounces of gold, UK house prices have been falling for some time. A home now costs the same as it did in 1986. Dominic Frisby looks at how …
24 Jun 2020
UK house prices holding up as city folk flock to the country
Property

UK house prices holding up as city folk flock to the country

The number of city-dwellers pursuing their dream of a rural idyll is on the rise. And despite the pandemic, house prices are holding up well, says Mer…
15 Jun 2020

Most Popular

An economics lesson from my barber
Inflation

An economics lesson from my barber

On reopening his shop after lockdown, Dominic Frisby’s barber doubled his prices. It’s all part of the post-Covid inflation process – and we’re going …
8 Jul 2020
Can Rishi Sunak save the economy with stamp duty cuts and half-price meal deals?
UK Economy

Can Rishi Sunak save the economy with stamp duty cuts and half-price meal deals?

John Stepek runs his eye over the chancellor's £30bn stimulus package and asks if it's enough to get the economy back on its feet after months of lock…
9 Jul 2020
A first-half home run for investment trusts
Sponsored

A first-half home run for investment trusts

The investment trust sector has seen some extraordinary performance in the first half of this year. Max King looks at what's behind it, and asks: is i…
7 Jul 2020