September 19, 2023 9:01 am

Insert Lead Generation
Nikka Sulton

Entering the property market offers rewards and income potential, whether full-time or part-time. But taxes are a consideration, whether you’re considering Airbnb hosting or long-term rentals. Let’s compare Airbnb hosting with buy-to-let and discuss their tax implications.


Airbnb host VS a buy-to-let landlord?

The difference between an Airbnb host and a buy-to-let landlord lies in their rental approach. Airbnb hosts offer short-term stays, often for vacationers or business travelers, with flexibility for personal use. In contrast, landlords focus on long-term rentals, typically involving families or individuals with specific tenancy agreements. While Airbnb hosts have limited control over guests, landlords can target tenant types like professionals, students, or families, offering stability in tenant selection.


Do you need a buy-to-let mortgage for an Airbnb?

If your residential mortgage provider doesn’t support Airbnb, consider alternative options. A buy-to-let mortgage is suitable for long-term property rentals, where you can’t reside in the property as it’s now an investment.

Other choices include a holiday-let mortgage, ideal for short-term rentals as a business. You can also explore remortgaging with a different residential lender, but be cautious of early repayment charges.

Holiday-let mortgages offer benefits for Airbnb hosts, allowing you to stay in the property during off-seasons and deducting expenses, including mortgage interest, from your income for tax purposes. However, they’re less common and come with higher rates and substantial deposits.

Buy-to-let mortgages can work for long-term Airbnb rentals, especially with Airbnb’s monthly rental option. But note that lender criteria assume standard tenancies of 6-12 months, potentially complicating short-term lettings. Additionally, some cities impose rental restrictions, making traditional market advertising a better option for extended rentals.


Which UK lenders offer holiday-let mortgages?

Despite the limited availability of holiday-let mortgages compared to buy-to-let options, there’s a rising demand in this niche market.

Surprisingly, the holiday-let rental sector weathered the pandemic reasonably well. Currently, there are only 16 fewer holiday-let deals compared to March 2020, when there were 162 available. In the UK alone, there are now more than 21 lenders specializing in holiday-let mortgages, including several building societies, catering to the growing demand.


Banks offering holiday-let mortgages:

  1. Hodge Bank
  2. Castle Trust Bank
  3. Metro Bank

Building societies offering holiday-let mortgages:

  1. Leeds Building Society
  2. Cumberland Building Society
  3. Furness Building Society
  4. Ipswich Building Society
  5. Monmouthshire Building Society
  6. Principality Building Society
  7. Teachers Building Society
  8. Vernon Building Society
  9. Tipton and Coseley Building Society
  10. Melton Building Society
  11. Scottish Building Society
  12. Mansfield Building Society
  13. Bath Building Society
  14. Furness Building Society


What happens if I put my property on Airbnb without the lender’s permission?

It’s essential to keep your mortgage lender informed about any potential income from your property, including Airbnb rentals. Since your property was financed with their funds, they have a vested interest in any profits.

Failure to notify your lender about Airbnb activity can lead to severe consequences. In the worst-case scenario, they may demand full mortgage repayment, potentially resulting in home repossession if you can’t comply. More commonly, lenders might increase your interest rate or impose substantial fees, both of which are unfavorable outcomes. Transparency regarding your Airbnb plans is the wisest course of action.


MORE Buy To Let blogs HERE: 

Buy-To-Let VS Residential Mortgage

Is Buy-to-Let Still Viable in 2023?

Tips for First-Time Buy-to-Let Investors UK

How to Choose the Right Buy-to-Let Property

Essential Guide to Buy-to-Let Home Insurance in the UK

Getting a Buy-to-Let Loan with Poor Credit

The Benefits of Buy-to-Let Mortgages

Can My Mortgage Be Interest-only?

Starting Your Buy-to-Let Business: A Guide

Who is eligible for a buy-to-let mortgage?

Why Buy-to-Let is not Dead

Property Investment: The Buy-to-Let Mortgage Essentials

Choosing Between Holiday Lets and Buy to Lets

Airbnb Hosting vs. Buy-to-Let: Tax and More


{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}