What are hosts, guests, and hosting websites?
For the purposes of this guide, ‘hosts’ are individuals who rent out their property on a short-term basis. On the other hand, ‘guests’ are those who rent property from hosts.
These days, the likes of Airbnb, Booking.com, Expedia and HomeAway are the primary way to book holiday accommodation for many people. Hosts will list their homes on these sites for guests to peruse and rent.
These websites hold themselves as electronic platforms and ‘information society service providers’ and benefit from light touch regulation. They operate all over the world and are governed by local laws, which are significantly different from country to country. When you rent out your property with these platforms, the responsibility to comply with local legislation will usually fall on the host.
While you can post your property and receive bookings in minutes, you should always think about the legal relationship between you and your guests and your obligations towards landlords, freeholders, and banks, because the platform won’t do it for you.
Planning permission in London
London is unique and has its own rules for short-term lets (ie lets of less than 90 days per let). Under the Deregulation Act 2015, you need planning permission if you’re providing sleeping accommodation as a short-term let on residential premises and:
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the total number of nights you provide in a year exceeds 90, and
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no person providing the accommodation (ie not one host) is liable for council tax payments on the property where the short-term accommodation is provided
In other words, you do not need planning permission if:
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the property is used as short-term accommodation for less than 90 days in total in a calendar year (between 1 January and 31 December), and
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at least one host is liable to pay council tax for the property
It is unlawful for a residential property in London to be used as a short-term let without planning permission if the conditions above apply.
If you plan to use your property for a short-term letting on Airbnb or another platform for over 90 nights in a year (across any number of different lets) and you aren’t paying council tax on the property, you will need to apply to your local council for planning permission.
If you exceed the 90-day London limit and have not demonstrated that you’ve obtained planning permission, Airbnb will automatically close bookings to your property and, to reactivate your calendar, you will have to show that you have obtained planning permission.
What should I consider before renting out my property as a host?
If you own a leasehold property
If you own a leasehold property (eg a flat held as a leasehold), you should check the terms of your lease before renting it out as a host. Your lease may prohibit subletting.
It’s important to follow the terms of your lease as any breach may result in court action (and you may be ordered to pay damages, pay legal costs or rectify the situation) or the freeholder (ie the landlord) may seek to forfeit (ie end) your lease.
If your lease prohibits subletting, you should speak to the freeholder. They may give you permission to act as a host and rent your property out as a short-term let. If you are granted permission, you should ensure that this is recorded in writing.
If you rent your property
Most residential tenancy agreements prohibit subletting. Breaching this prohibition could give your landlord a cause to seek to evict you using a Section 8 notice. You should seek permission before subletting your property on either a short or long-term basis.
In some cases, your landlord may be happy for you to sublet, but it’s always good to have their written consent first.
If you have a mortgage
If you have a mortgage, you should check the terms of your mortgage deed. If you want to start subletting, your bank may have to change your terms to a buy-to-let mortgage.
If you have insurance
Before renting out your property in the short-term as a host, you should also check the terms of any relevant insurance policies you hold. Not only will you want to make sure your guests are covered by your policies, you should also check whether subletting your property may invalidate your insurance. If the terms of your insurance policy prohibit subletting, you should speak to your insurance provider.
What occupation rights do short-term rental guests have?
While Airbnb may describe you as a ‘host’ and your tenants/lodgers as ‘guests’, this doesn’t mean that the usual occupation rights rules don’t apply.
The rights that an occupier has depend largely on whether they’re legally classified as having a lease or a licence. For help distinguishing between these and information on the different rights they confer, read Lease, licences and tenancies and Residential tenancies.
You and your guests’ rights and obligations in relation to exclusive possession and eviction will also depend on whether you rent out a private room, a shared room or a whole property.
Renting out an individual room
If you rent out a room in your own home while you are living there and:
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you share living accommodation with the guest, or
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your guests are sharing but are not a group (like a hostel)
The guests will usually be considered to be occupying under a licence and, therefore, to have fewer occupation rights (eg they don’t need to be given as much notice to leave).
If you rent out a private room but you don’t live in the property, this may be considered a tenancy and the occupier could have ‘exclusive occupation’ of the room. This will, however, depend on the unique circumstances of the occupation. For example, if you provide cleaning services this could help the guest to be considered to be occupying under a licence.
Ask a lawyer if you have any questions or concerns about this.
Renting out an entire property
If you rent out your entire property, your guests will probably have a lease (ie a tenancy) and will likely have ‘exclusive occupation’ of the property for a certain period of time.
However, as above, if you also provide certain services (eg cleaning services) and have a key to go into the property regularly, it could be a licence. You could also consider entering into a holiday letting agreement to help ensure you let out your holiday home in the correct way.
To learn more about the occupation styles above, read Residential tenancies and Taking in a lodger.
What legal obligations do hosts have?
Remember that, while you can easily find your next ‘guests’ on an online platform, you should always consider the legal relationship you are creating, what obligations you’ll have, and what rights guests will get.
Resident landlords (ie those who let out part of a property under a lease that is their only or main home, even if only on an occasional basis) have certain responsibilities. These include::
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keeping the property in a safe condition and not at risk of fire
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providing an energy performance certificate (EPC)
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complying with selective licensing obligations
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complying with HMO licensing obligations (if applicable)
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paying income tax on earnings over the £7,500 annual tax-free allowance that’s available under the government’s Rent a Room Scheme
You should inform your guests about local regulations on things like recycling and noise. You may also wish to inform neighbours that you are letting your property to avoid any unwanted neighbour disputes.
You should also check whether you need to tell HMRC about income earned as a resident landlord, even if you only occasionally rent out part of your home via short-term rental apps such as Airbnb.
Ask a lawyer if you have any questions about your legal obligations as a landlord, tenant, host or guest.
Upcoming changes to short-term rental law
Note that the Levelling-up and Regeneration Bill, currently going through Parliament, intends changes to the rules for short-term holiday lets in England. Those who use their homes as short-term holiday lets in prime tourist destinations might require planning permission to do so. The government also plans to hold a consultation on a new registration scheme for short-term holiday lets. The proposed scheme might involve physical checks of holiday lets to ensure compliance with health and safety, noise, and anti-social behaviour regulations.
Holiday lets across the UK and abroad
Note that Scotland already has a short-term let licensing scheme similar to that which the government is planning to introduce in England. In Northern Ireland, tourist accommodation cannot be provided without a valid certificate from the National Tourist Board. Wales also plans to establish a registration or licensing scheme in the future.
Popular tourist destinations abroad each have their own rules. For example, in Portugal and Greece, anyone wishing to advertise and rent out their home to paying guests must register. In parts of the Republic of Ireland, hosts are only allowed to short-term let their own primary residence if they have registered to do so.
