Probably not.
Lease Covenants
Check the terms of your lease and if the lease states that you should not use the property for any purpose other than a private unit in the occupation of one family only then short-term holiday lets will not be permissible.
There have been a few recent (2018) cases that make it clear short lets breach common lease covenants.
Nemcova v Fairfield Rents Ltd [2016] UKUT 303 (LC)
For the covenant within the lease to be observed, the occupier for the time being must be using it as his or her private residence. For a property to be used as the occupier’s private residence, there must be a degree of permanence going beyond being there for a weekend or a few nights in the week. Whilst a person who occupies for a matter of days and then leaves can claim that during the period of occupation he or she is using the property as his or her private residence, the occupation is transient, so transient that the occupier would not consider the property he or she is staying in as being his or her private residence even for the time being. Granting very short term lettings (days and weeks rather than months) breaches the covenant within the lease.
Bermondsey Exchange Freeholders Limited v Kevin Geoghegan Conway
HHJ Jan Luba QC dismissed an appeal against the decision in Bermondsey Exchange Freeholders Limited v Kevin Geoghegan Conway, upholding the District Judge’s findings that short let use was in breach of lease clauses stating:
Not to use or permit the use of the Demised Premises or any part thereof otherwise than as a residential flat with the occupation of one family only.
Not at any time to assign sub-let or part with possession of part only of the Demised Premises.
Not to part with or share possession of the whole of the Demised Premises or permit any company or person to occupy the same save by way of an assignment or underlease of the whole of the Demised Premises.
Without prejudice to the absolute prohibitions hereinbefore contained not to assign or underlet the whole of the Demised Premises without the prior written consent of the Landlord such consent not to be unreasonably withheld.
Central London County Court, 1 May 2018.
20 Nottingham Place Management Company Ltd v Cooper
In 20 Nottingham Place Management Company Ltd v Cooper LON/00BK/LBC/2016/0020, short let use of the whole property was found to be a breach of the following lease clauses:
(i) That the Lessee will use the demised premises for the purposes of a self-contained private residence in one family occupation only and/or for office purposes And will not divide or sub-let part of the demised premises (Clause 4)
(ii) Nor shall any act deed or thing be done in or about or in connection with the property which shall or may be or become a nuisance (whether indicatable or not) or which may grow or lead to the damage annoyance inconvenience or disturbance of the Lessors the tenants or occupants of any other flats in the property … or detrimental to the reputation of the property as a block of high-class private residential flats (Clause 5)
(iii) That the Lessee will not use or permit to be used the demised premises or any part thereof … for any purpose which would depreciate the character and reputation of the demised premises and the property (Clause 6);
(iv) That the Lessee will not do or permit to be done in or upon the demised premises or any part thereof anything which may render any policy or policies of insurance effected in respect of the property by the Lessors void or voidable (Clause 12);
(v) That the Lessee will not assign underlet or part with the possession of the whole (or part as aforesaid) of the demised premises (except by way of mortgage or charge of this Lease) without the prior consent in writing of the Lessors such consent not be unreasonably withheld (Clause 13).
Laxcon Developments Ltd v St John Guy Rodgers
As a leaseholder you could be in breach of your lease if your guests are causing noise in the property, and the freeholder, or any of the other leaseholders can bring a claim against you. It has been held that by permitting holiday let guests to use the property, and those guests, either having parties or the leaseholder permitting them to do so, the leaseholder would be responsible, as if he were hosting those parties himself.
Check the terms of your lease and if any of the covenants are likely to fall foul of any of the findings from the cases above, you probably cannot let your leasehold property for short-term (holiday) lets.
Health & Safety Obligations
If you are a leaseholder with a long lease, and decide to let the property as holiday accommodation, the health and safety laws would apply to you as you would be considered to be a landlord under the law. From asbestos to work equipment you will have legal obligations for health and safety.
The Regulatory Reform (Fire Safety) Order 2005, s.3 states that the responsible person for complying with the Order is the person who has control of the premises (as occupier or otherwise) in connection with the carrying on by him of a trade, business or other undertaking (for profit or not). If you are operating a holiday let, you would be carrying out a business which means that you would need to comply with the Order.
Insurance Terms
In most leasehold flats it is usually the freeholders’ obligation to take out insurance to cover the entire building, and the leaseholder may choose to secure its contents by obtaining contents insurance.
Leaseholders must make sure that if they intend to let their property as a holiday let, their insurance is not invalidated by so doing. Property owners should inspect both of the policies to ensure that they are not in breach of either. Furthermore, they could be in breach of their mortgage terms if they do not have adequate insurance in place.
Mortgage Terms
Leaseholders who have mortgaged their property need to ensure that by letting their property as a holiday let they do not breach the terms of their mortgage.
Part 1 of the Council of Mortgage Lenders handbook, at note 16.4, states that the lender should advise the borrower that consent is to be obtained if the borrower wishes to sublet the property after completion. Note 16.4.3 states that the lender reserves the right to change the terms of the mortgage, or requires a higher rate of interest if the borrower decides to consider the request for consent.
It is usually a term of the mortgage that interest rates are available for as long as the owner occupies the property as their only or main residence. Any letting may require consent in writing from the mortgage lender, and failing to do so may lead to a demand for repayment in full or repossession of the property.
Taxation
The Income Tax (Trading and other Income) Act 2005, ss. 784-799, state that landlords who let or licence a furnished room in a property, which is their main or only residence, benefit from ‘rent-a-room’ income tax relief. The relief is worth £7,500 (2024). There is no need to file a tax return for those who earn less than the above threshold. However, property owners who exceed the threshold must comply with the tax rules and submit a return.
Further Reading
Short term lets, long term consequences (Nearly Legal blog)
Can a freeholder/manager prevent a leaseholder from letting out their property on Airbnb and similar short term letting platforms? (Anthony Gold blog)
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