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Renting out your home as a holiday let

Renting out your home as a holiday let on sites like Airbnb can be a great way of making some extra cash, but there are certain rules to be aware of...

Renting out your home as a holiday let

Renting out your home with Airbnb or other holiday lettings websites can be a great way to help you cover your mortgage and even to pay it off sooner, but it is not for everyone and there are risks.

You might be considering letting your whole home when you go away on holiday yourself in order to cover your travel costs or maybe just letting out a spare room in your property while you are living there.

When platforms like Airbnb work at their best, you can end up making new friends from around the world as well as making cash. However, there are inevitably horror stories of guests who have caused thousands of pounds in damage.

You’ll also need to check that your local council, mortgage lender and home insurer will allow you to offer holiday rentals and make sure that you understand the impact it will have on your tax bill.

How much could I earn?

  • Airbnb says its typical UK host earns £3,000 a year by hosting for an average 36 nights a year.
  • Rates vary hugely depending on location and seasonal demand from tourists. Properties in Edinburgh, for example, can command very high rent during the Fringe Festival in the summer.

Planning issues

  • Check local rules carefully as some authorities require planning permission for a “material change of use” if you plan to offer temporary sleeping accommodation in a residential property.
  • In London, the government recently introduced an exception in order to allow short lets without planning permission so long as the cumulative number of nights does not exceed 90 in a calendar year and so long as the property owner pays council tax.
  • Even in London, local planning authorities have retained the right to exclude certain properties or certain areas from this exception, so you should still check with your council.

Mortgage trouble

  • Not all mortgage lenders will allow you to carry out short-term lets, although hopefully the situation will improve over time.
  • Lenders that do allow holiday lets include Metro Bank, Halifax, Nationwide Building Society and Santander (as of March 2017).
  • Speak to a mortgage broker for an up-to-the-minute advice on which lenders are most accommodating to short-term lets as policies are constantly being tweaked.  

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Listing my home and vetting guests

  • When listing your property, make sure you specify which rooms guests have access to and which are off-limits
  • Good photographs are vital. It can even be worth investing in professional shots to show your home off at its best
  • Make sure you correspond with potential guests in advance and read their ratings from other hosts to ensure that you know what type of holiday they are planning. There is a big difference between a couple on a relaxing getaway and a group of friends on a stag or hen party
  • Look at other comparable property listing to determine pricing. Consider adding a cleaning fee

Preparing my home

  • Invest in a safe or somewhere where you can lock away your most valuable items. We know of people boarding up part of their loft with items they don’t want touched hidden away within, and who have lockable cupboards in the kitchen.
  • The host is expected to provide bed linen, towels, cooking equipment and also cover utilities bills and offer wifi access as part of the nightly rate

When platforms like Airbnb work at their best, you can end up making new friends from around the world as well as making cash.


  • Airbnb offers its own guarantee that protects hosts for damages that occur during “eligible” bookings up to $1m or local equivalent (currently around £800,000)
  • BUT, make sure you read the exclusions carefully. Airbnb itself states “this does not take the place of homeowners or renters insurance or of adequate liability coverage”
  • In order to be fully protected you would need to take out a specialist policy, as ordinary landlords insurance excludes short lets

Listing costs

  • Airbnb charges hosts 3 per cent of the final sum paid by guests as a service fee for using the platform. Guests also pay a fee to Airbnb of between 6-12 per cent.
  • Tripadvisor charges the same percentage commission to hosts but does not charge guests a fee.
  •’s commission varies according to a number of factors but on average it is around 15 per cent. It does not charge guests a fee.
  • Homestay keeps the 15 per cent of each booking. Guests pay this as a deposit.


  • If you are renting out a room in your main residence you should be able to benefit from the government’s rent-a-room scheme which allows you to earn up to £7,500 per year tax free.
  • If not you will have to pay tax on the income at your normal rate, although you should be able to offset some of the costs during the rental period such as utilities bills.
  • Under new rules, from April 2017 you will be able to earn £1,000 per year from small scale property-letting activities tax-free.
  • You can’t claim both allowances on the same let as the new allowance applies to lettings that don’t qualify under rent-a-room.
  • If you are claiming rental expenses against your income you won’t be eligible for the new allowance either, so anyone with more than £1,000 per year of expenses won’t benefit.

Being a good host

While there are no official codes of conduct for homeowners looking to rent out their home as a holiday let, sites like Airbnb do expect hosts to  ‘think carefully about their responsibilites’ and guidance is given on everything from providing a clean space to responding to guests in a timely manner. The site does state however that it has “no control over the conduct of hosts and disclaims all liability.” That being said of course if you’re a poor host it’s going to come out in your reviews and in really extreme cases Airbnb will ban you from listing a property. Needless to say, when a host in the US let himself into the house he was renting out while his guests were sleeping in 2014 it didn’t go down to well. The host was permanently banned from listing on the site and the guests received a full refund.

Leave a comment (6)* Required

  1. Ms Sharp


    Are there any health and safety or data protection regulations I need to take into account?

    For example: am I required to have fire doors, fire extinguishers, smoke detectors, gas safety certificates etc as I would if I was renting a property in the normal way or running a standard B&B?

    Also, do I need to keep records of visitors from outside the UK for 12 months like with a normal B&B and do I need to comply with the GDPR or am I exempt from that if I just rent our a room in my house or put my house up for short term let on AirBnB?

  2. David Todd

    I work away and looking to buy property . Can I use as holiday let weekends and holiday periods ? I would generally be at Property Tue , Wed and Thur nights . It will be prime city centre location

    • HomeOwners Alliance

      Hi David, if you’re buying with a mortgage then you’d need to check that your lender is happy with the arrangements, and also check with your insurer, but otherwise, this is the type of arrangement that you see with airbnb (there may be other companies, but this one came to mind!).

  3. Dale Harrison

    I am looking to use my house as a holiday rental. I used your link to see Airbnb reviews. After reading the reviews I am supprised you recomend them unless they are paying you? Are there any other companies out there with a good reputation?

  4. A


    I am trying to find the local legal information which states that you do not need to convert your home to a commercial premises to rent it out as a holiday let. We have a sale going through and this has come up. We are located in Cornwall. Can you help with any information?

    • HomeOwners Alliance

      Hello, your local planning authority will be able to tell you whether renting your home out as a holiday let will be a “material change of use”.


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