Bed and breakfasts, and in particular those accessed through Airbnb, are becoming increasingly popular across the country. As one might expect, active listings are especially numerous in London – but every region in the UK is well represented on the Airbnb platform.
The profile of Airbnb hosts is almost as diverse as the properties themselves. But it clearly must include homeowners aged 55+, a proportion of whom might conceivably be interested in finding out about equity release.
Perhaps surprisingly, given the size of this potential market for their products, other lifetime mortgage providers have been slow to respond. The accepted practice has long been to prohibit borrowing against properties with any aspect of commercial use. This means homeowners are restricted in their ability to offer B&B rooms or holiday annexes to paying guests, leading to a potentially difficult choice between their business and releasing equity from their property.
At Aviva, we’ve revised our equity release lending criteria to allow lending on Airbnb and bed and breakfast accommodation. We’ll also allow borrowing on properties with holiday cottages or holiday annexes in the grounds, so long as the personal business takes place in up to 50% of the property/land to be secured.
Income from B&B letting could boost retirement income significantly. There is also the advantage of meeting interesting people and staying active.
Greg Neilson, MD, Retirement said:
'Allowing customers to release equity on a property and continue with a commercial venture, makes sense. We know that many individuals are keen to continue working into retirement and a business run from the home can provide a great way to do this.’
People in or nearing retirement today are having to be more resourceful when looking to meet their retirement needs, and this is only set to continue. Many are also recognising their later years as a time of great opportunity and are looking to fulfil the dreams and ambitions that haven’t been possible in their earlier years. So it’s no surprise that this older demographic is also increasingly turning to equity release to meet their retirement needs and ambitions.
When it comes to the growing popularity of equity release, the figures paint a compelling picture. The Equity Release Council* found that the number of new plans agreed in the first half of 2018 exceeded the entire size of the market in 2014 and represented an 81% increase since the first half of 2016.
For more information Download our new lending criteria document.
To help your clients make the most of their property wealth, visit the Equity Release Hub.
* Equity Release Council Autumn 2018 Market Report