AirBNB or Holiday Lets instead of standard AST?

Hi Richard,

I believe in some London councils there are rules about the maximum number of weeks you can let out to AirBNB.

"Hosting in London:

Short-term rentals in Greater London are subject to a planning restriction, which makes the use of residential premises as temporary sleeping accommodation a “material change of use” for which planning permission is required.

In 2015, with the Deregulation Act, the Government introduced an exception to this restriction. The exception allows residential premises to be used for temporary sleeping accommodation without this being considered a “change of use”, so long as the cumulative number of nights of use as temporary sleeping accommodation does not exceed 90 nights in a calendar year, and so long as the person who provides the accommodation is liable to pay council tax. Local planning authorities may direct that this exception does not apply to certain residential premises or to residential premises in certain areas. You should check the position carefully with your local authority.

If a property is used for short-term rentals for more than 90 days in a calendar year, the exception does not apply. You should check the position carefully with your local authority.

As of 1 January 2017, Airbnb’s systems will automatically limit entire home listings in Greater London to 90 nights a year, unless the hosts confirm that they have the required permission to share their space more frequently. More information can be found here.

The provisions of the Deregulation Act are explained here. The Government’s policy statement, outlining the rationale for the new rules, is here."

Hi Richard

The returns may appear attractive on first glance, but there are a lot of other considerations. To name a few, the property must be furnished with everything a holiday maker is likely to require (down to the last teaspoon), some places (such as greater London) won't allow you to rent without an expensive licence for more than 90 days/year, even if you can rent for longer you can't guarantee that guests will flock to your door unless your property really is something very very special, and you will be in default of most mortgage lenders' terms. Bear in mind also that you will have to pay for professional cleaning and laundry between EACH lot of guests, all utilities which can be substantial where lights have been left on permanently and central heating has been run at 30 degrees 24/7 and believe me this does happen, and most prospective guests will send endless emails before deciding which property to stay in.

Even then, you can't guarantee their business because most people will blanket a lot of landlords before deciding on one to opt for. I don't use AirBnB in the Uk but I have been renting out holiday homes abroad and it's a lot of work which will have to be done by you (you can't get fed up and hand it over to a lettings agents as most don't do this) .

You will basically be running a hotel without meals - you'll need special insurance, housekeeping, someone to check them in and out, marketing, accounts, it's a lot of work and the rules for tax are quite strict, look at HMRC website helpsheet 253

Thanks for the responses if i may summarise, so higher revenue, higher costs, more work and plenty of regulation to investigate. Some useful detail to think about - thank you. I am a big believer that turnover is for the vain. Any thoughts on comparative average profits of holiday lets vs residential letting?