UK: UK-based commercial bank NatWest is introducing ‘Airbnb-friendly’ mortgage terms to support borrowers who are struggling to pay loans and bring increased flexibility for customers who are looking to rent out their homes on a short-term basis.
Under the new mortgage terms, new and existing NatWest customers will no longer have to apply and pay for a ‘Consent to Let’ if they let out a room or their entire home for no more than 90 days a year [as per current UK laws] through an “approved platform” such as Airbnb. The mortgage will enable customers to rent out their room or home “with confidence” and allow more families with high mortgage benefits to “take up the benefits of home sharing”.
Increasing numbers of customers and families may look to rent out rooms or entire homes to help make ends meet, either when the principle homeowner is absent for a holiday or if there is a gap between tenancies on a rental property, according to NatWest.
The bank estimates that a typical host in the UK currently earns almost £5,500 a year from renting out on Airbnb or similar platforms, accounting for 69 per cent of an average annual mortgage payment.
At the same time, Airbnb says that more than 75 per cent of homeowners surveyed in the UK are considering ways to supplement their income – potentially through home sharing – as families try to keep pace with higher interest rates. In addition, 47 per cent are open to listing their home on a platform like Airbnb to cover the rise in monthly payments, however 40 per cent of borrowers add that their mortgage provider would block them from letting on short-term rental platforms.
Lloyd Cochrane, head of mortgages at NatWest, told The Daily Express: “At NatWest, we want to support our customers by widening their options through our proposition, including sharing their homes through sites such as Airbnb.
“By updating our policy, this will offer more flexibility and allow more people to take up the benefits of home-sharing.”
Other well known banks such as Barclays, Halifax and Metro Bank already offer similar terms to borrowers, which include a 90-day annual letting limit and typically a loan-to-value cap of 75 per cent.
NatWest joins other major lenders already offering similar terms, including Halifax, Barclays and Metro Bank. Similar restrictions – 90 days or four months’ of letting – usually come with a loan-to-value cap of 75pc.
