For many people, the dream of owning a second home in a location of natural beauty or historic interest is an appealing one. Whether nestled along the coast, in a quaint market town, or surrounded by rolling countryside, these properties offer a welcome escape – and, increasingly, an opportunity to generate income through short-term holiday lets.
However, turning a second home into a source of rental income introduces a number of legal, regulatory and insurance considerations – the most crucial being the need for appropriate holiday let insurance.
A holiday home
Some owners use their second property solely for personal holidays and weekend retreats – the classic âbolt-holeâ or âweekend cottageâ. Others see the potential for additional income by letting the property to paying guests when not in use.
The rise of platforms like Airbnb and Vrbo has made short-term letting more accessible than ever. Yet with this opportunity comes the need to comply with certain obligations, which often still apply even if:
- you’re only letting for a few weeks a year;
- the property remains primarily for your own use;
- youâre renting out just a part of the home (such as a self-contained annexe or a spare room).
Before you list your holiday property, you may need to consult the following:
- your local council. Regulations on this subject vary widely but you may need to register with them as a provider of holiday accommodation and you might also need to satisfy their health and safety criteria via inspections;
- HMRC (sometimes just called the âRevenueâ or âTax Officeâ). Your income will need to be declared and taken into consideration as part of your overall tax position;
- your mortgage provider. Some mortgage provisions may specifically ban you from letting your property unless you have a buy-to-let mortgage;
- your property insurance provider â under the auspices of landlords insurance or holiday let cover.
Weâll be discussing here the last point but please donât forget that the above conditions will typically apply even if youâre letting only part of your property or an individual room within it. That will also be the case if youâre only letting it for a few days or weeks each year (such as an Airbnb rental).
Insurance considerations
Although it might be hard to believe, the moment you allow someone to stay in your property in return for payment, you have become a landlord. That is a legal definition and is not something dreamt up by the insurance industry.
The moment you become a landlord, any existing owner-occupier insurance protection you have on your property may become invalid. That could be a serious risk and exposure for you.
If you wish to maintain protection for your possessions and indeed your very bricks-and-mortar, you may typically need to switch immediately to landlordsâ insurance.
Why it matters – even for part-time landlords
Even if your holiday home is only let out occasionally, the risks donât disappear. A single serious incident could have financial and legal consequences far beyond the income you earn from short-term stays.
By taking out a suitable holiday let insurance policy, you protect:
- the physical structure of the property;
- your financial investment;
- your legal position as a landlord;
- your peace of mind as a property owner.
Cover4LetProperty can help
At Cover4LetProperty, we specialise in protecting landlords, second home owners, and holiday let hosts across the UK. Our holiday let insurance policies are designed to offer flexible protection that reflects how you actually use your property – whether you let it regularly or just a few times a year.
We also offer a free guide to holiday letting, which provides further detail on the responsibilities, benefits and risks of letting out your holiday home.
If you’re unsure what level of UK holiday home insurance cover you need – or if youâre already letting your property and want to check whether your current insurance is still valid – please donât hesitate to get in touch. Our expert team will be happy to offer friendly, no-obligation advice.
