How to get a Mortgage with income derived from Airbnb or Uber
4 minute read
Recent research by Telegraph Money revealed that borrowers who rent out all or part of their property via Airbnb or similar services could be in breach of their mortgage terms and conditions, and in theory could be asked to repay the mortgage balance immediately if the lender finds out. Understandably, this could come as quite a shock to those who have been using such services to supplement their income.
Mortgage terms and conditions can vary considerably between lenders, but in all cases you undertake a binding agreement to comply with the lender’s rules when you take out a mortgage. The Telegraph’s research showed a variety of attitudes and approaches among the country’s nine largest mortgage lenders.
Four of the nine biggest lenders – Barclays, HSBC, Nationwide and Yorkshire Building Society – do not allow borrowers with standard residential mortgages to let out the property through Airbnb under normal circumstances, while the others – Lloyds, Metro Bank, RBS, Santander and Virgin Money – may allow it either with or without prior consent, with a variety of limits and conditions applicable:
|Barclays||No||–||May give consent to let for periods over 6 months only, and only with a standard tenancy agreement in place.|
|HSBC||No||–||Say their mortgages are intended for those who intend to reside in the property on a permanent basis.|
|Lloyds||Yes||No||Borrowers can only let out the property for a maximum of 16 weeks in any year.|
|Metro Bank||Yes||No||Borrowers can only let out the property for a maximum of 90 days in any year.|
|Nationwide||No||–||Doesn’t allow Airbnb-type lettings on residential mortgages on a first home, or on buy-to-let mortgages. Mortgages on a second home allow the property to be let out for up to 18 weeks a year.|
|RBS||Yes||Yes||Permitted with prior consent for residential mortgage holders, otherwise breaches the mortgage conditions. Lettings on a buy-to-let mortgage only allowed for tenancies of over six months.|
|Santander||Yes||Yes||Consent to let the entire property invokes a £295 fee, while letting a single room would be in line with their policy on lodgers – usually OK but requires consent. Will not give consent within the
mortgage’s first six months.
|Virgin Money||Yes||Yes||Short-term Airbnb-type lettings only permitted on a single room in the property, and with prior consent. Letting out the whole property requires consent and a standard tenancy agreement to be in place.|
|Yorkshire||No||–||Say they do not consider mortgage applications from borrowers that intend to sublet their property.|
Can I get a mortgage with income from Airbnb or Uber?
As you can see from the table above, not all mainstream lenders allow Airbnb-type lettings, and smaller lenders can also vary in their approach. So what are your chances of getting a mortgage if all or a portion of your income comes from Airbnb, Uber, or another non-traditional source of employment in what has become known as the “gig economy”?
The good news is that there are most definitely lenders out there who cater for these kinds of scenarios and, as more and more people either earn all their income or supplement a salary with some form of freelance or contract work, more lenders in the market are shifting their lending policies to accommodate this. Similarly, do not be surprised if in the next few years you see more lenders willing to accept Airbnb-type lending in their mortgage conditions.
For the purposes of assessing a mortgage application and affordability, some lenders can potentially treat Uber drivers and Airbnb hosts in a similar manner to other freelancers or contractors. What that often means in practical terms is verifying income by either looking at business accounts, or with SA302 year-end tax calculations from HM Revenue & Customs. Whereas some mainstream lenders are reluctant to consider any form of income verification outside of traditional payslips from a permanent employer, many of the smaller niche lenders will take a more flexible approach to building a picture of your actual income from all sources.
If you are a Airbnb host or Uber driver looking to either buy a new home or remortgage for a better deal, contact us today to see how we can help. At Just Mortgage Brokers we have years of experience in arranging mortgages for those with non-standard sources of income, and we can help you find the lender and the mortgage deal that are right for you.