To set the tone for the growing potential of Airbnb as an investment and hosting opportunity, consider the staggering statistics that underscore its global reach and popularity.

The platform boasts over 5 million hosts worldwide, with more than 7.7 million active listings spread across over 100,000 cities. This expansive network has attracted more than 150 million users globally, booking over 1.5 billion stays. [1]

These figures not only highlight the widespread acceptance and use of Airbnb, but also point towards the lucrative opportunities it presents for property owners considering entering the market. With such a vast user base and extensive listings, venturing into the Airbnb hosting world seems more promising than ever.

The growing popularity of Airbnb among travellers for its flexibility, affordability, and quality accommodations has naturally sparked interest among property owners considering the venture. With the potential for lucrative returns, setting up an Airbnb property is an attractive proposition. However, the process involves more than just listing your property online; understanding the mortgage implications is crucial.

Mortgages for New Airbnb Properties

The process to register a property on Airbnb is reasonably straightforward, but the financial aspects, particularly the type of mortgage you need, require careful consideration.

If you’re looking to purchase a property specifically for Airbnb, the type of mortgage you’ll require can vary significantly based on several factors, such as your intentions with the property, its location, and projected income. Generally, there are a few mortgage options suitable for Airbnb properties. These include:

Holiday Let Mortgage

These are often interest-only mortgages, where the lender calculates maximum borrowing based on the property’s potential income across different seasons. This option is particularly designed for properties that will be let out on a short-term basis to tourists or travellers.

Buy-to-Let Mortgage with Short-term Let Permissions

Some lenders offer traditional buy-to-let mortgages that allow for short-term lets. These are typically considered when a holiday let mortgage isn’t feasible due to the property’s location or expected income. The affordability calculations mirror standard Assured Shorthold Tenancies (ASTs), but with permission to engage in short-term letting.

Letting Out a Property You Already Own

If you plan to convert your current property into an Airbnb, the steps you need to take can depend on your existing mortgage agreement:

Standard Residential Mortgage

If you live in the property and plan to rent parts of it while residing there, or if you intend to rent the entire property for short periods not exceeding 90 days per year, you might not need to change your mortgage. However, lender permission is required to ensure compliance with your mortgage terms.

Residential Mortgage with Consent to Let

Should your letting plans exceed 90 days per year, and you won’t live in the property, obtaining consent to let from your current lender could be an option. Although this may lead to changes in your mortgage conditions, such as higher interest rates or additional fees. A mortgage adviser can guide you through both of these options.

Challenges with Airbnb Letting and Mortgages

Lenders can be reluctant to approve mortgages for properties intended for short-term lets, like Airbnb, due to the high turnover of guests and associated risks. Violating your mortgage contract by engaging in unauthorised short-term lets can lead to severe penalties, including the demand for immediate full repayment of the mortgage.

Insurance Considerations

Regardless of the mortgage situation, informing your home insurance provider about your letting activities is essential. The nature of short-term lets may not be covered under standard policies, and failing to disclose such information can risk your coverage. A protection adviser can guide you through the most suitable coverage options for your unique needs.

Finding the Right Mortgage

Navigating the mortgage landscape for Airbnb properties can be complex. Independent research or consulting with a mortgage adviser can help identify lenders receptive to short-term letting arrangements and secure a mortgage product that aligns with your Airbnb ambitions.

Understanding these nuances and preparing accordingly can ensure a smooth transition into the Airbnb market, making your venture both compliant and profitable. Please do get in touch for tailored advice.



[1] Search Logistics – Airbnb Statistics 2024 – User & Market Growth Data