Scotland business

Edinburgh Fringe sub-letters 'risk mortgage breach'

Bedroom Image copyright Thinkstock
Image caption The average AirBnB rental in Edinburgh is reportedly £2,187 per month

Edinburgh Fringe sub-letters could be breaching their mortgage agreement, leading property experts have warned.

Many mortgages do not allow homeowners to leave and rent out their property on a short-term basis.

Accommodation booking sites like AirBnB make it very easy for people to let out all or part of their home.

It is a popular, and potentially lucrative business, for Edinburgh residents during the festival season and over Hogmanay.

The average AirBnB rental in Edinburgh is reportedly £2,187 per month.

But experts have warned there are many things homeowners should consider before sub-letting.

David Marshall, operations director at Warners Solicitors & Estate Agents, said: "For regular homeowners who are thinking of moving out of their property for a short period to make it available for festival let, it's vital that they check the terms of their mortgage to ensure that this is permitted.

"They would also have to consider the risks of renting their property out for a short period of time, and how easily they would be able to recover costs of any damage caused by tenants."

Legal obligations

Those looking to make a quick profit during the festival season should also be wary of damage to their property.

Neil McInnes, director with Edinburgh-based Umega Lettings, said specific holiday-let mortgages were not sold on the high street and required larger deposits. They also have higher interest rates.

"With long-term letting, the legal obligations on the landlord are clearer and the tenant is responsible as the resident of the property, whereas visitors or guests in holiday accommodation expect a higher level of service from their host and take less responsibility for the property as a result," he said.

"In other words, you have people taking less care of the property as they are only in it for a limited time, compared to long-term tenants who want to enjoy comfortable surroundings and decor."

AirBnB advises all hosts who use their service to check with their mortgage lenders first in case subletting is prohibited.

Related Internet links

The BBC is not responsible for the content of external Internet sites