September 6, 2019
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Airbnb regulations for renting out your holiday home to guests
These days, a trip away isn’t a trip until the Airbnb is searched for, paid for and fully booked. But, with short term lets becoming a much more popular option for modern travellers, what kinds of things do you need to know before throwing open your holiday home doors?
 
The great thing is that almost anyone can be an Airbnb host and you can list your space in any location across the world. Not only is it free to sign up and get your space on the listings but you can also post just about any type of property. From entire holiday homes and apartments to boats, tree houses and even castles – if you have these to offer up, of course!
 
If you own your holiday home, renting with Airbnb can be an ideal way to help you cover the cost of your mortgage but as with any potential rental, it can come with some risks. This means you’ll need to ensure a whole host of checks before you enter the world of renting.
 
From your local council and mortgage provider to holiday home insurance, we’ve put together a handy guide to help you understand the necessary Airbnb regulations for renting out your property to guests.
 

What’s the definition of a holiday let?

It’s important not to fall into the trap of assuming all short lets are the same. There are different variations for different renting needs. So let’s take a look at the different instances when it comes to letting your holiday home.
 

Assured Shorthold Tenancies or ASTs

These are the most common type of tenancy if renting from a private landlord or letting agent. Created under the Housing Act 1988, most will not be relevant to an Airbnb hosting situation, unlike the two examples below:
 

Holiday lets

This is where a property is let out for the purpose of a holiday. Whilst there is no limit to the length of a holiday let, as the name would suggest, it needs to specifically be for a holiday and not used as a long-term let or in the case of a lodger. 'Holiday letting' is defined in the Housing Act 1988 as 'a tenancy the purpose of which is to confer on the tenant the right to occupy the dwelling-house for a holiday'.
 

Resident Landlords

In this instance, the landlord lives in the same building but within self-contained accommodation. Examples include an annexe or garden flat.
Even though Airbnb describes you as a ‘host’, this doesn’t mean your guests’ occupation rights are any different. And Airbnb doesn’t have the monopoly on rental law so it’s important to look into each type of let and which one applies to your own rental needs.
 

Do you need planning permission when renting out your holiday home?

Check local rules carefully as some authorities require planning permission for a “material change of use.” That’s if you plan to offer temporary sleeping accommodation within a residential property.
 

London-specific rules and regulations

In 2017, a short term rental regulation was introduced for the whole of Greater London. This is known as the ‘90-day rule’, as it means that entire home listings can only be booked out for a maximum number of 90 days in the year. As the only city in the world with such a specific rule, this London-specific regulation was put in place to assist with responsible home-sharing, which can only be a good thing.

The measure negates the need for landlords to apply for planning permission for short or holiday lets in their home and is also designed to limit the number of nights across the entire year a landlord or host can rent out their property.

If your property isn’t contained within the borders of Greater London, it may fall into the category of a self-catering property or even holiday let accommodation. In this case, you may end up liable for business rates. These, however, will only apply if you’re renting out your holiday home to guests for more than 140 nights a year. Though even in London, local planning authorities have retained the right to exclude certain properties or certain areas from this exception. In any case, it’s always best to check permissions with your council.
 

How much could I make from my Airbnb rental?

Letting out your home or spare room through Airbnb can end up becoming a lucrative business and could help you earn thousands of pounds. However as you’d expect from any kind of holiday home rental, the amount you could earn can vary drastically. It all depends on your type of house, the area in which you live, the facilities you’re able to offer your guests and how long you are able to let it out for.
 
According to figures quoted by the Home Owners Alliance, Airbnb suggests a typical host can earn up to £3,000 a year by hosting guests for an average of 36 nights. That figure could obviously rise according to location and seasonal demand.
 

Do I need to rent out my entire home?

No, you can just rent one room if you like. In fact, many owners decide to do this as a way of bringing in some extra income whilst still being able to enjoy their home themselves. Many guests also prefer this option as the rates tend to be much lower than when checking into a hotel or renting an entire property.
 
Of course, renting out a room still comes with the same necessities and provisions as renting out your holiday home as a whole as you’re essentially running a much smaller scale hotel. From exchanging keys and washing towels and bedding to dealing with any additional request, there are still lots of things you need to be aware of. So you’ll need to make sure you’re happy to deal with these instances. Though if it’s just the one room you’ve got to rent out, you may wish to consider taking in a lodger instead.
 
If you want to become an Airbnb host but you rent your holiday property, you’ll need to check in with your landlord to make sure there are no clauses against subletting in your rental agreement.
A person holding a phone in front of them with the Airbnb app opening in a bedroom

What about insurance for my holiday home?

Once you’ve weighed up the pros and cons of renting out your house, before you go ahead and press enter on that Airbnb listing, you’ll need to ask yourself a pretty important question. What about insurance? Picture this. You get your holiday home guest-ready by way of deep clean. Fresh towels and sheets have been sorted. You’ve even bought a complimentary bottle of wine or two. What could go wrong? Turns out a fair amount potentially…  
 
Look at it this way. What happens if you choose to rent out your second home but all your worldly possessions end up being stolen? Or, you welcome in a seemingly innocent, trustworthy couple, group or family only to find out they have a penchant for wild parties, all-night raves or constant noise. The last thing you want is to be dealing with complaints from neighbours or for your house to end up trashed, leaving you to fork out a hefty bill when they eventually leave.
 
Even if you have home insurance already, you’ll need to take a look at the small print – most standard policies won’t cover you if you rent out a room, or the whole house, to paying guests.
 
As it’s not your main residence, standard home insurance won’t be enough to cover you against any potential risks. Furthermore, you could end up in serious trouble if you fail to disclose your intentions to rent out your holiday home to guests. And that’s the last thing you want. This is where holiday home insurance comes in.
 
Not only does this type of insurance keep your holiday home protected against fire and other accidents but it will also cover any associated risks that come with leaving this type of house empty for long periods of time.
 
It might also be worthwhile keeping your most treasured possessions under wraps or taking them out of the premises ahead of welcoming strangers into your home. Just take a look at what happened when two London flatmates left an £8,000 Banksy print in their house after renting it out to an Airbnb guest.
 
Though it’s unlikely you’ll be able to keep everything of worth out of your abode. After all, you want the aesthetics to appeal to your potential guests. This is why it’s also a good idea to look into taking out contents insurance for any furniture and appliances you have residing in your holiday home.
 

The Airbnb ‘host guarantee’

If you get into a situation where your holiday home needs repairs or replacement items, this could end up costing you a pretty penny. But don’t assume the liability insurance alongside the 'host guarantee' that comes with renting out your house with Airbnb will pay out for these. There are plenty of exclusions contained within this guarantee, as you may expect.
 
It’s essential to understand that whilst this host guarantee covers up to $1million (around £800,000) of damage caused by guests on eligible bookings, it’s in no way an exhaustive insurance policy and will not cover everything you may need should the worst happen in your abode.
 
From pets to personal liability, this guarantee comes with many limitations, which is why  it’s even more important to cover yourself with holiday home insurance from a specialist like Insurance Choice.
 

Check any existing contracts or leases

When considering a short-term rental, it’s crucial to do your research and look into not only local laws but national ones for your area. Each city will differ in terms of rental regulations. You’ll need to check your building lease, contract and any regulations you must adhere to.
 
In the first instance, it’s worth speaking to your mortgage provider to see if you have any restrictions that prevent you from renting out your property. You don’t want to go through the stress and hassle of organising such an event only to end up in breach of contract.
 

Fire safety law

Fire safety may not be at the forefront of your mind as an Airbnb host but it’s essential if you’re renting out your holiday home to guests on a short-term basis.
 
In England and Wales, by law, you are wholly responsible for ensuring anyone using your property is kept safe from the risk of fire. You’ll need to carry out a fire risk assessment and where necessary take the steps for any kind of improvement as well as maintenance of these fire risks.
 
Whilst you can opt to carry out the fire safety check yourself, many hosts or landlords will arrange for their local fire and rescue service to do one for free as it helps to put their minds at rest.
 
Bear in mind that in Scotland and Northern Ireland, the rules and regulations for fire safety law are different to those in England.
 

Deposits and cancellation policies

Airbnb has created a space where you can choose whether to charge a security deposit - though in some cases Airbnb requests this themselves - and which cancellation policy you want to invoke. These can be either flexible, moderate or strict. If guests cancel outside the selected amount of time, you, as the host, will hold onto their money, minus the relevant Airbnb fees.
 
There are some further cancellation policies you can choose in certain circumstances. For example, if your guests stay longer than 28 days, they’ll need to pay monthly but it’s all explained in further detail on the Airbnb website. It all depends on how you plan on renting out your holiday home. If you have a number of bookings back to back you may want to opt for a stricter policy than you would for the occasional let.
 
When it comes to renting out your holiday home, the subject of insurance should be at the top of your list. Don’t delay, get a quote with the specialists at Insurance Choice today.