Caution still over risks of short term lending for lenders and homeowners:


In certain parts of the UK some homeowners could still be barred from letting out their property for less than three months without explicit planning permission. 

Whilst the law changed in March 2015 to allow such short term lettings, it is open to Councils to exempt properties from this rule and so you must check with your local Council whether they have exempted your property from the Deregulation Act 2015 and, if so  you will need planning permission in order to let your property.

The home owner is advised to: - 

a)Check with their lender to see if they need permission to let their property;

b)Invest in a specialist insurance policy to cover them against accidental damage, liability, home care emergency and possible loss of income due to unforeseeable events. 

c)Comply with the legal obligation to make sure that the property complies with national and local health and safety regulations such as obtaining certificates from Gas and Electricity that such supplies are safe. 

d)Acquire an Energy Performance Certificate for the Property unless they intend to let rooms only and where there is a shared kitchen/bathroom i.e. where each room is on a separate tenancy.  From April 2018 where an EPC is required then it must have a rating of minimum Band E for residential letting. 

e)Ask a specialist to carry out a fire risk assessment on the  property, and then improve any fire safety measures (for example, by installing smoke alarm and sprinkler systems and providing fire extinguishers) and then keep such fire risks and safety measures under review.

Note of caution to lenders: Failure to comply with fire safety laws will almost certainly invalidate any landlord insurance cover your borrower has and on which you as a lender will rely. So lenders need to consider whether to include in their requirements the services of a certified fire safety professional to review the property to see if it complies at the time the property is being let and on a regular basis thereafter. 

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Metro Bank endorse Airbnb (and sharing economy) (post by Eric Gummers 18 Nov 2016) Metro Bank make an express and forward thinking permission to all their borrowers permitting letting of up to 90 days.   Metro Bank says mortgage customers can rent out homes on Airbnb. ‘A pioneering move to support the sharing economy.’ says Metro Bank. Generally lenders expect customers to ask permission before offering their homes for short-term lets, and some will charge a fee to give consent. Paul Riseborough, chief commercial officer at Metro Bank, said: “Our focus is on making our customers’ lives as straightforward and convenient as possible, and we therefore hope today’s news will give our customers the reassurance they need to jump in and take advantage of everything the dynamic sharing economy has to offer.”
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