Your investor guide to Airbnb: Get up to speed on the minimum requirements, changing legislation, and taxes

investor guide airbnb

Airbnb has completely upended the holiday-let market, for both property investors and consumers alike. The relatively young company has grown rapidly in recent years, creating opportunities for travellers and landlords looking for new avenues of expansion.

And as the pandemic emerged, demand reached unprecedented levels. As the world shut down, many of us embraced “staycations”. As such, property investors snapped up holiday homes across the nation’s tourist hotspots.

Some may have deemed this a temporary fix necessitated by circumstance. But, Brits ended up developing a taste for homegrown beaches and greenery. Around 73% of UK adults are more likely to opt for a staycation over the next year rather than holiday abroad, according to analysis of public data.

Airbnb’s business model still holds a lot of potential for property investors and expanding landlords. To help you get ahead of the coming summer months, this blog will break down the key elements you need to know for investing in Airbnb property.

Source: Yahoo! News, TimeOut, inews, Travel Daily Media

What are the minimum requirements and what changes are on the horizon?

Before you get started, you’ll want to make sure you meet the minimum requirements.

Minimum age to run an Airbnb

Airbnb users – both travellers and “hosts” – need to be aged 18 or over.

Becoming a host

According to Airbnb, the hosting process will follow a 5-step process: you’ll need to assess if your space is a good fit for your target market, get it ready for guests, list your asset on Airbnb’s platform, decide on how you’ll host (maximum number of guests, minimum number of nights etc), and set your specific pricing strategy.

Types of properties

When it comes to the types of properties you’ll be able to list on Airbnb, there are a wide range of options available. You can utilise everything from single rooms all the way through to private islands.

Airbnb itself separates these options into four types of “places”: entire place, private rooms, hotel rooms, and shared rooms. Outside of Airbnb’s parameters though, you’ll need to be aware of wider public rules you may need to follow.

Do I need a license and the council’s approval for an Airbnb?

You may need to obtain approval, special permits, or business licenses from the local authority you’re operating in. These requirements will vary between councils, with some having more stringent rules than others.

In London, for example, residential property may only be used for short-term lets if two specific conditions are met. These conditions are: the total number of nights that a property is used for short term letting must not add up to more than 90 nights in a calendar year, and at least one of the persons providing the accommodation must be liable to pay council tax at the property where the accommodation is provided.

Looking ahead, we may see a rise in these kinds of requirements. Michael Gove, the Levelling Up Secretary, has proposed people who convert homes into short-term holiday lets should require planning permission in English tourist hotspots. But, these plans have already faced push back. A lot of consultation would also be needed before anything is introduced.

Legislative changes take time and must be ironed out, but it’s still worth keeping an eye on the news so you’re not taken by surprise.

Source: Airbnb, Airbnb, Airbnb, Airbnb,, The Guardian, The Times

short term stay

What about the finances?

Once you’ve got all your ducks in a row, you can start focusing on the financial side of things.

How much can I earn from an Airbnb in UK?

Fortunately, Airbnb’s can provide a solid income source. While returns will vary, on average, hosts earn £650 a month from their listings.

Of course, if you invest tactically, you may be able to generate healthy yields. For example: between October 2021 and September 2022, Conwy had the highest median annual host earnings in Wales, totalling over £7,600.

Properties in Conwy had an overall average price of £220,536 over the last year, according to Rightmove. For comparison, London properties topped £725,000 over the same period.

Airbnb’s commission

Of course, you’ll want to weigh up any potential returns against your costs. Most Airbnb hosts pay a flat service fee of 3% of the booking subtotal. The subtotal will be your nightly price, plus any optional fees you charge to your guests – such as a cleaning fee.

Say you charge £100 a night for a 3-night stay, along with a £60 cleaning fee. The subtotal would be £360. A 3% service fee on this booking subtotal would equate to £10.80. So, on the £360 booking, you’d earn £349.20.

Tax matters

You’ll also need to factor in taxes. While this can be complicated, Airbnb investments may actually offer a number of tax advantages.

Your Airbnb property could qualify as a furnished holiday let if it’s based in the UK, and is let with a view to making a profit. Also, it must be available for let for at least 210 days a year, and be rented for a minimum of 105.

If it ticks these boxes, you’ll be able to take advantage of allowances on furnishings, capital gains tax perks, and reliefs on income and inheritance tax. But, the tax landscape may be shifting somewhat elsewhere.

Recently, some authorities in England announced plans to double council tax on second homes, providing updated legislation is passed by Westminster. Meanwhile, in Wales, local authorities may soon be able to charge a council tax premium on second homes of up to 300%.

HMRC has also intensified its crackdown on tax evasion by landlords of short-term properties – the kinds booked through platforms such a, VRBO, and Airbnb.

Yet, despite these recent developments, the National Residential Landlords Association still believes the tax system is trickier for private residential landlords to navigate, rather than people who run short-term letting businesses.

There will be many tax costs you’ll need to prepare for. But at the same time, allowances and reliefs are available. To fully get up to speed on your options, you’ll want to seek guidance from qualified financial planners, accountants, and other professionals.

Source: Mercers Solicitors, Wales Online, Rightmove, Rightmove, Airbnb, UK Landlord Tax, Landlord Today, Mercian Accountants, The Telegraph

paying tax when renting out airbnb

Airbnb rules

If you decide to move ahead with an Airbnb investment, you’ll want to make sure you’re on top of your requirements. While Airbnb will likely provide clear guidance, it expects hosts to follow its rules in these broad areas: reservation commitment, timely communication, listing accuracy, and listing cleanliness.

Long term rentals & tenant rights

There are also long-term considerations you should take into account. While Airbnb stays are typically thought of as short-term options, it is possible to book long-term commitments through the platform.

You’ll need to be careful with these kinds of bookings. A recent ruling found long-term Airbnb lets are the same as traditional assured shorthold tenancies (AST). This means you may need to adhere to strict safety, rental, and eviction rules.

EPC rating for your accommodation

You may also need to keep your Airbnb property on the right side of EPC rules. It’s crucial you get on top of this. Nearly 5 million rental rooms across the UK are in properties with an EPC rating of D or below. This puts these rooms at risk of being unlettable.

Source: Airbnb, Airbnb, Airbnb, Landlord Zone, Shelter,, Mortgage Solutions

financing airbnb

How can you prepare for the future?

There’s a lot going on in the holiday-let scene. New legislation looms, which may push up costs for property investors – both monetary and administrative. But demand is still there.

The cost-of-living crisis is making people think twice about jet-setting. Also, the UK tourism and recreation sector has emerged as one of the UK’s strongest industries in terms of output growth, according to Lloyds Bank.

Incorporating an Airbnb asset into your portfolio could provide a solid income stream. Fortunately, we have a range of specialist finance products available that can assist with this.

Financing your Airbnb

Our buy-to-let mortgages bring bridging like speed and flexibility to landlords looking to expand. This will likely prove crucial over the coming months, as UK high street banks start curbing their mortgage lending once again.

Our bridging loans can also allow you to jump on any opportunities or requirements that emerge in the market. Our Permitted & Light Development loans can help upgrade your homes to meet new EPC minimums, while our Auction finance will allow you to secure any bargains you find at auction.

Regardless of how you may want to move into this market, our underwriters will be there for you from day one. We’ll do our best to match you with a solution that allows you to take advantage of a staycation boom.

Source: TTG media, Mortgage Introducer


MFS are a bridging loan and buy-to-let mortgage provider, not financial advisors. Therefore, Investors are encouraged to seek professional advice.

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