Posts with tag: short-term lets

Planning on Turning Your Rental Property into a Holiday Let?

Published On: August 30, 2018 at 8:33 am

From the tax changes to mortgage interest relief to the current proposals to introduce a minimum three-year contract for rental tenancies, landlords have been receiving a lot of stick recently.

It’s no surprise, that due to this, landlords are contemplating alternative options concerning the generation incomes from their properties.

For some, the best option has been to turn to commercial building, such as offices and shops. However, for others, it is the letting terms, rather than the properties, that they are choosing to change.

Research undertaken by the RLA last year discovered that there had been a 75% rise in the number of London landlords listing more than one property on Airbnb between February 2016 and March 2017.

Meanwhile, recent figures from the Office for National Statistics revealed the total number of holiday lets increased by 5.5% in 2016-17. This occurred at around the same time when landlords were being hit with harsh Government measures.

Lisa Evans, Commercial Property Solicitor at Kirwans law firm, commented: ““Landlords are undoubtedly going through a really tricky time right now.

“Punitive tax changes and the introduction of endless red tape has hit landlords hard, and many are doing all they can to find their way to retain their income without having to go through the process of offloading their properties.

“For some, turning rental homes into holiday lets where appropriate can seem like the answer to their prayers, offering higher yields than traditional buy-to-lets and retaining the right to claim mortgage interest tax relief.

“However, as with any investment, there are always important points to consider.”

Lisa then sets out some key points to consider prior to turning your rental properties into holiday homes:

1) Check that your mortgage lender allows you to do so

Your first port of call should be your mortgage lender to enquire as to whether you need to change your mortgage to allow you to do so; otherwise you could face a higher mortgage rate, fine, or even demands of immediate repayment or threats of repossession.

2) Prepare for higher mortgage repayments

If you do need to change to a holiday let mortgage, you could face an early payment penalty fee, as well as higher rates from the limited number of lenders who offer such mortgages.

3) Don’t forget to change your insurance

Changing your property to a holiday let could make your buildings and contents insurance invalid, so contact your insurance company to find out what you need to do to ensure your property continues to be protected.

4) Check whether the property is leasehold

If so, go through the lease with a fine toothcomb and check that you’re permitted to use the property as a holiday let, or you may fall foul of the law.

5) Be strict about the number of guests

If there’s a possibility that you might let the property to more than four people, then you may need to obtain an HMO licence. Overlooking this important fact could result in prosecution and a huge fine.

6) Do your sums

As with buy-to-lets, there’s a good chance that there’ll be a period of the year when your holiday let is unoccupied, so you need to make sure that it makes enough income the rest of the year to cover these quiet times. Do your sums and make sure that the rent can cover any shortfall.

And if you’re thinking of selling up and buying a holiday let instead . . .

Choose your location carefully

The pretty, chocolate box cottage may look beautiful, but if it’s miles away from the nearest shop you may find that tourist interest is low. Conversely, the property you’re interested in may be in a holiday hotspot, but if it is ugly or visually unappealing, there may be surprisingly few enquiries. Think about the elements you’d look for if you were the customer, and try and choose a property that’s both in a busy tourist area and looks pretty too.

Government-backed Scheme aims to Improve Standards in the Short-let Sector

Published On: August 21, 2018 at 8:59 am

Author: Em Morley

Categories: Lettings News

Tags: government,short-term lets

Rise in housing waiting lists as landlords sell up or convert to Airbnb lets

As part of attempts to crackdown on rogue landlords, short-let landlords and those listing properties on Airbnb, will be able to apply for national accreditation as of next month.

This accreditation, supported by the Government, will entail voluntary assessments that examine the safety standards of a property, in addition to cleanliness and legality.

Chairwoman of the UK Short-Term Accommodation Association (STAA) commented: “With a new industry, everyone is trying to figure out what this should look like.

“How do you make sure hosts know what the health and safety standards are and what the legal requirements are? If it’s not done properly that creates its own issues.”

Over 1,000 properties are reported be already signed up to the initiative, which will allow landlords to utilise the official STAA accreditation logo when they advertise their property, once their home has successfully passed assessment inspection.

Annual fees will range between £100 and £200 for individual homeowners and up to £1,000 for companies.

A Ministry of Housing, Communities and Local Government Spokesman said: “Short-term lettings support tourism and enable households to boost their income, but we are clear they should not have a negative impact on the wider communities.

“We welcome the work that the STAA are doing to drive up standards and promote best practice.”

Landlords, do you think this new scheme will help improve standards in the short-let sector? We’d love to hear your thoughts.

The Truth About Using Airbnb to Let your Property

Published On: August 17, 2017 at 9:42 am

Author: Em Morley

Categories: Property News

Tags: Airbnb,letting a property,short-term lets,tenants

Airbnb is fast becoming the preferred method of accommodation for leisure and business travellers. For Airbnb hosts, it can be an easy way of making some extra cash, especially if your property is awaiting new tenants or is on the market. But is it really that simple?

Recently, there have been a number of stories where guests have damaged properties, people have been injured at Airbnb homes and hosts have been left with a lot of clearing up to do.

Nicole Rogers, of DAS Law, answers the most important questions for existing Airbnb hosts and those thinking of letting their properties through the platform:

If your property or belongings are damaged or stolen, will your home and contents policy cover you?

The Truth About Using Airbnb to Let your Property

“It is unlikely, as the insurer will usually not have catered for paying guests when arranging the policy. The host would need to clarify with their insurer as to whether their cover would be sufficient to cover losses. Airbnb does offer a host guarantee, whereby the firm promises to reimburse hosts for damages of up to £600,000; the company adds that hosts should not consider this as a replacement for owner’s or renter’s home insurance.

“Whilst a host is not required to take out specific landlord insurance, it would be advisable to speak with a specialist broker or insurer to ensure sufficient protection.”

Could sharing your rental or leasehold property with Airbnb cost you your tenancy or home?

“Millions of Airbnb users may have unknowingly breached the terms of their leases, leaving them vulnerable to legal action or losing their tenancy.

“The vast majority of tenancy and leasehold agreements are likely to state that the property in question may only be used as a private residence. This would prevent tenants from renting out or sharing their flat or home for short periods. It should be considered by anyone letting their property out through Airbnb to check their tenancy or leasehold agreements first.

“It is not just those renting that should be wary of breaking contracts; mortgage companies may also take a dim view of homeowners offering short-term lettings of their property. It would be wise for owners to contact their mortgage company before offering their home out, as they may very well be breaking their mortgage contract. Whilst buy-to-let mortgages allow for assured short-term tenancies, short-term is often defined as six months; clearly Airbnb stays are considerably shorter than this.”

What are the tax implications for the income you receive?

“Money received from hosting is generally regarded as income; therefore, it is likely that Income Tax will be payable, so the host may need to declare their earnings to HM Revenue and Customs (HMRC). It is possible that a host may be entitled to certain tax reliefs or allowances, so it is advisable to take tax advice regarding this.”

What precautions do you need to take to comply with health and safety legislation?

“Hosts must ensure that the premises are reasonably safe for visitors. With regards to fire safety, landlords should inform visitors of a fire evacuation route. The Regulatory Reform (Fire Safety) Order 2005 makes landlords responsible for taking steps to protect the people using your premises from the risk of fire. This means that a host should carry out a fire risk assessment, if necessary, improve the fire safety measures and keep the risks, and fire safety measures, under review.

“If a visitor has suffered an injury at a host’s premises, he/she may seek to pursue a personal injury claim, particularly if the host has breached its duty of care to the visitor, which subsequently has caused foreseeable injury.”

As an Airbnb host, do you need to have public liability insurance?

“There is no legal obligation to take out public liability insurance to host via Airbnb. However, it would be worthwhile to do so in order to protect yourself, the host, in the event of an injury claim from the visitor.”

Before deciding to let a property via Airbnb, make sure you’re aware of your legal obligations and responsibilities – don’t get caught out!

Estate Agent Launches Interior Styling Service for Airbnbs

Published On: August 11, 2017 at 8:13 am

Author: Em Morley

Categories: Property News

Tags: Airbnb,home staging,property marketing,short-term lets

A London estate agent has launched an interior styling service for landlords and property owners using Airbnb to let their homes.

Portico Host has introduced the Airbnb interior styling service alongside its traditional Airbnb management option.

The company says that the service is ideal for those with empty properties – either landlords with void periods, or those trying to sell their homes – which will enable “vendors to earn money until their property sells and landlords to cash in until they find the perfect tenant”.

The service is part of Portico’s premium Airbnb management package, which costs 20% + VAT.

The agent employs top interior stylists to kit out clients’ properties with furniture and soft furnishings, maximising their appeal to potential Airbnb tenants. The stylists work within the client’s budget and taste, putting together a proposal before any work is started.

As part of its Airbnb management service, Portico Host will also look after the entire Airbnb process, from setting up the property listing, organising professional cleaning and hotel-quality linens, arranging 24-hour check-in, handling guest bookings and communication, and dealing with all property maintenance.

For those with furnished properties, the agent offers a standard Airbnb management package, which costs 15% + VAT and includes all of the services explained above, except interior styling.

The agent recently helped a client with the following transformation:

Before

After

It achieved this look for just £1,140, but can work to any budget. The full costings are below:

Estate Agent Launches Interior Styling Service for Airbnbs

The Marketing Director of Portico, Fiona Patterson, says: “If you have a vacant property, you’re a landlord and find yourself with a gap between tenancies, or you’re away a lot and your home is often unoccupied, listing your property on Airbnb can be a great money maker – and now, our new Airbnb management service, Portico Host, can help make the process simple and successful.

“A well styled or staged property is key to increasing occupancy rates, guest ratings and the amount you can charge. Better still, the service almost always pays for itself, as our statistics show that staged properties sell for 8% more than empty or un-staged properties.”

Are you inspired to get your property on Airbnb or use these clever tricks to maximise your property marketing?

What is Rent-a-Room Tax Relief and How Does it Work?

Published On: July 6, 2017 at 9:14 am

Author: Em Morley

Categories: Finance News

Tags: live-in landlords,lodgers,rent-a-room tax relief,short-term lets

Rent-a-room tax relief, or the Government’s Rent a Room Scheme, allows you to earn up to £7,500 per year tax-free from letting furnished accommodation in your home.

What is Rent-a-Room Tax Relief and How Does it Work?

So how does it work?

The tax exemption is automatic if you earn less than the threshold. This means that you don’t need to do anything. If you earn more than the threshold, you must complete a tax return. From 6^th April 2016, this threshold is £7,500. Be aware that for the 2015-16 tax year, the threshold was £4,250. You can then opt into the scheme and claim your tax-free allowance – you do this on your tax return.

Who does the scheme apply to?

The Rent a Room Scheme applies only to landlords who let a furnished room to a lodger in their own home, or to those who run a guesthouse or bed and breakfast.

Short-term lettings, such as those found on Airbnb, are also covered.

However, if you plan to create separate residences that will no longer be part of your home – for instance, if they have their own entrances and facilities – you will not be covered by the scheme.

There is an exception if you let furnished accommodation in a self-contained flat where the divisions of the room are temporary.

There are no strict rules about what constitutes a temporary division, but HM Revenue & Customs (HMRC) will question how long the partitions have been in place and how long they are intended to remain. You will also be asked to state whether the separate residence has its own address and entrance.

If you plan to install kitchens and bathrooms in the property, it will be difficult to argue that the divided residences are temporary.

Unfurnished rooms and rooms that are being used by others as an office are also disallowed. Landlords who let rooms while they are abroad are also unable to claim the tax relief.

Rent-a-room tax relief is perfect for live-in landlords, but you must be aware that the scheme is currently under review for short-term lets.

Short-Term Lettings Industry Vows to Stop Landlords Turning Homes into Hotels

Published On: February 22, 2017 at 11:15 am

Author: Em Morley

Categories: Property News

Tags: Airbnb,London,short-term lets,short-term lettings

The short-term lettings industry, which includes Airbnb, joined local authorities and community groups at City Hall yesterday to discuss growing concerns about landlords turning homes into hotels.

Short-Term Lettings Industry Vows to Stop Landlords Turning Homes into Hotels

Around a quarter of London homes listed on Airbnb are believed to have been let for more than 90 days last year – many illegally and in breach of an act designed to prevent landlords turning much-needed housing into what have been described as hotels by Labour’s London Assembly housing spokesperson, Tom Copley AM.

According to Airbnb, 4,938 of its entire London home listings – 23% of the total – were let for three months or more last year, despite a law requiring anyone doing so to apply for planning consent.

But the firm is among those that yesterday reaffirmed its commitment to enforcing the 90-day limit during a meeting hosted by Tom Copley AM, which focused on the need to stop landlords letting their properties beyond the limit set by the Government.

Speaking after the meeting, Copley said that there is “clear consensus over the need to collaborate to stop short-term lettings sites being abused by professional landlords”.

Guidance issued by the Department for Communities and Local Government (DCLG) in 2015 removed the need for planning permission to rent out a room or property as temporary accommodation for less than 90 days per year. While the 90-day limit remains in place, local authorities say it is difficult to enforce.

Copley continued: “We know that some landlords are essentially transforming long-term homes into hotels without planning permission. This meeting showed that there is clear consensus over the need to collaborate to stop short-term lettings sites being abused by professional landlords.

“Local authorities just don’t have the resources they need to enforce the 90-day limit and so it falls to providers to step in. It’s hugely welcome that Airbnb have stuck their heads above the parapet. We need others in the industry to now follow suit and to work together on enforcing the 90-day limit, including sharing data with boroughs where necessary.”

He said: “There is no disputing the many economic benefits to Londoners of tourism that Airbnb and their counterparts create. We must ensure the costs don’t outweigh the benefits, by preventing commercial landlords from taking advantage of the system and putting even more pressure on our housing supply.

“It’s also crucial that hotels and the hospitality sector don’t face unfair competition from professional landlords setting up as hotels by the back door, avoiding taxes and regulations.”

He added: “Yesterday’s meeting was a positive discussion about the need to ensure hosts cannot break the law by letting out properties short-term for more than 90 days per year. However, effective enforcement hinges upon effective legislation from Government, and we need them round the table for any future discussion. I look forward to continuing this work with platforms, boroughs, community groups, the GLA and central Government to ensure short-term lettings are effectively regulated.”