Are you considering purchasing a leasehold apartment to holiday let? Although it’s quick and easy to make a listing on the ever-growing list of rental websites; in reality there are a number of steps you should take before buying an apartment and opening your doors to paying guests. Whether you intend to let for a limited number of weeks to help with costs or to provide a more regular income you should ensure that you can comply with the terms of your lease. Have an appropriate mortgage and suitable insurance for holiday letting.
Does your lease allow you to let your property?
From insurance to your lease and mortgage agreements, we take a look at what you’ll need to be considering and the action you should be taking before letting your property…
It’s estimated there are tens of thousands of leasehold properties currently listed on AirBnB and similar holiday rental sites. However, an extremely common clause in any lease is that the property must be for “private residence” possibly prohibiting the subletting of the property for short periods.
So what does that mean? In essence if you were to holiday let the apartment and your lease included this or a similar clause, you’re in breach of your lease. As a result you could face the consequences should your freeholder choose to take issue with it. These could include and extend to your landlord asking you to cease holiday letting and potential legal action.
A recent ruling in the Upper Tribunal (Lands Chamber), which is the highest property court in the land, has supported this stance. In this particular case one resident in a block of London flats fell out with fellow neighbours by letting her property on AirBnB and a range of other similar sites. When others in the block became disgruntled by her actions they asked the landlord to take action, with the case subsequently going to court.
With a legal precedent now set, if you own a leasehold apartment and are wanting to holiday let it you should first check your lease. For those considering purchasing a leasehold apartment to holiday let it’s vital you check the terms of your lease before committing to buy. Seek advice from your solicitor and be upfront with them and the estate agent regarding your intentions to holiday let. In many popular holiday areas across the UK apartments are springing up. Some new build apartment blocks are intended for use as second homes and holiday lets. Those that are should have appropriate leasehold wordings to allow holiday letting. However do double check and seek advice.
So does the above leasehold scenario extend to a property purchased with a mortgage?
The answer really lays in the agreement that you have with the lender. If you’re intending to let your second home to paying guests it’s important you have the right mortgage. Either:
Seek advice from your mortgage adviser who’ll be able to guide you through your options. They’ll provide advice to ensure you comply with the lenders requirements and source a loan to match your needs. Taking the right advice should be both cost effective and tax efficient.
When people visit and stay in your home they bring with them a unique range of insurance requirements. These far outreach the standard household buildings and contents policy cover you’d usually have for your home. For example:
These are all areas that could cause distress and expense were you not to have the correct insurance cover.
When holiday letting your second home to paying guests it’s essential to take advice on suitable insurance. Boshers offer specialist holiday home insurance to holiday letting owners across the UK. Need an insurance quote for your holiday letting apartment? Please give us a call on 01237 429444.