Short term letting

by Readers Question

9:36 AM, 1st July 2016
About 2 years ago

Short term letting

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Short term letting

I am planning on renting my flat out on short term lets i.e. not ASTs. Short term letting

My lease has 2 clauses which I need some guidance on:

  1. The flat must be used for residential purposes
  2. It should not be used for business purposes

There is no restriction in the lease about how long I can rent it out for, so no issue with short term letting.

My belief is that by letting on a short term basis I’m still meeting the residential clause as people will still be living there.

I want to change the use from C3 to c1 to pay business rates instead of council tax. If I do that, will this cause issues with the 2nd clause?

Any help very much appreciated.

Many thanks

Mehul



Comments

Puzzler

9:53 AM, 1st July 2016
About 2 years ago

I am afraid short terms lets do not count as residential as it is not someone's home and they are a business.

You also need to check your mortgage as most prohibit short term lets.

Who is the freeholder or management company? You would also need their written permission

You may not need planning permission, however, but you would need to check with your local authority as they vary on this and if all the other hurdles can be overcome (unlikely) you can apply for business rates.

Bear in mind, it's a lot of work doing the housekeeping, unless you are in a high tourist area it's probably not worth it!

Harlequin Garden

10:10 AM, 1st July 2016
About 2 years ago

legislation changed recently on short term letting - Londoners were not allowed to do short lets under 90 days but now in line with the rest of the country which allows short term for 90 days a year - this is for home owners only who pay council tax. Because your lease doesn't stipulate a sublet restriction it doesn't mean that you get around the legal planning use.

If your lease is clear on no business use is there a reason you think that business rates are allowed!!!!!! C1 is hotel use - how big is your flat?

It sounds to me like business use and I think it would to the authorities and your freeholder as well.

There is a lot of hype with Airbnb type use - I've found that a regular let at a lower rate with all bills paid by the tenant comes out around the same as a high short term but has voids - or even consistent, the council tax etc is paid by a long term tenant and you don't have the hassle of of cleaning/linen etc and paying someone to let a tenant in at 2am because their flight was late. I've also found that with the amount of property available for short term let the rates are not that good and the work around servicing the flat is not worth it - but then I may be lazy and content with my lot.

Puzzler

10:14 AM, 1st July 2016
About 2 years ago

Another thought, you would need to check the block buildings insurance as standard policies exclude short lets.


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