Are you risking your home if you rent out a room?

April 6, 2016 by Brendan

Home owners

Property experts, banks and building societies recently issued a warning to homeowners who may be considering renting out their home to users of the Airbnb website and others similar services.

The Chancellor announced that people who earned income from renting out their home to paying guests, would receive the initial £1,000 tax free. However, according to the Council of Mortgage Lenders (CML), most owner occupiers of a property will find a clause in their mortgage agreement which states that they have to obtain consent from the lender before renting out their property.

An investigation by Guardian Money indicated that people who were considering registering with Airbnb to host guests in their home, could be facing severe penalties, which may include a higher mortgage rate, a fee or even a demand for the immediate repayment of the amount outstanding.

The investigation found that the only homeowners likely to benefit from the tax break were older owners who owned their property outright. When asked, not all lenders said that they would give consent to rent out a primary property.

Lenders which declined include RBS, the Bank of Ireland, Nationwide and the Co-op. Others may consider the request, including Santander. Although https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Harborough building society will allow short term renting for up to 24 weeks during the year with prior approval, the building society will charge around two percentage points above the cheapest product.

If you think you may want to rent out your home to others, consult a CeMAP qualified adviser who can help you select the most suitable mortgage.