There has been a lot of news and discussions about short term lets recently. The housing charity, Shelter, recently conducted some research on short term living. Their research found that 12% of parents who rent privately feel as though short term lets may leave their children feeling unsettled.
Short term let is the name given to a tenancy agreement of less than six months. Any tenancy agreement less than six months is not governed by the Landlord & Tenant Act 1985 so there is no form of protection for a landlord and/or a tenant. Short term lets are rare as they are only suitable for very specific situations.
Who uses short term lets?
Short term lets are rare as they are only suitable for very specific situations. Someone might be living away from home for a few months due to work commitments. Or they may be waiting for a new house to be built for them to move in to.
Recently there has been a rise in demand for letting on a short term basis. This is mainly through the increased popularity of holiday let websites such as Airbnb. It often works out that it is cheaper to rent a property through an Airbnb than it is to have a hotel, hence their growing popularity. However, often landlords don’t appreciate that their current insurance policy won’t cover this type of let.
What are the benefits for landlords?
There are a lot of benefits to tenants but what are the benefits to landlords? Well they give landlords another option when thinking about selling or reletting. The landlord can let the property on a short term basis while they make their mind up. Then also short term let while the property is on the market and the sale is progressing. Having an empty property is usually not an attractive prospect to landlords so a short term tenancy provides an income in the interim.
What are the issues with Short Term Letting?
There is no legal backing for landlords with short term lets. Also if the tenants then refuse to leave the property getting them out can be tricky as there is no legal process or contract. It may be that a longer term let is more preferable for the landlord. People often don’t appreciate that short term lets are completely different from a typical long term tenancy. This is because the Landlord and Tenant Act 1985 governs all tenancy’s over six months long.
You also have to ensure that you have the right insurance in place. A typical landlord insurance policy is unlikely to cover the potential risks that short term lets create. These can include malicious damage by tenants and other risks. Whilst you might potentially get a higher income it is very important to understand your responsibilities.
Two big issues for landlords with short term lets are void periods and wear and tear. Short term lets may bring flexibility but they also bring uncertainty as to when the property will be relet. It is the nature of the beast.
There will also be additional costs for wear and tear due to the endless stream of tenants coming and going. With tenants staying for short periods they are unlikely to take as good care of the property as long standing tenants.
Lastly, the landlord will need to cover the costs in a short term let that would otherwise be paid by the tenant in a long term let. These include utility bills, internet, TV license, and council tax. The property would need to be fully furnished and well equipped. These all need to be considered when looking at short term lets.
For competitive commercial insurance call us now