According to estimates from the Office of National Statistics, housing is the largest non-financial asset in the UK, with a net value of £5.5 trillion. In 2016, the average property price in the UK was £216,750, eight times higher than the average wage. With three out of four young people thinking about buying a house now relying on parental help – letting and subletting is increasingly becoming a long term housing solution for many.
The acute shortage of affordable homes has turned renting into a great business for those who already own a property. The number of people renting from private landlords now outstrips those in council and housing association homes.
Most tenants seal the deal directly with a landlord who owns the property. However, it is also possible to rent from another tenant, who has rented the property from the owner. This is called subletting.
Subletting. Are tenants doing anything wrong?
Most tenants need their landlord’s written permission before they can sublet, and it is only possible to sublet parts of the property, such as a spare room. According to the Landlord and Tenant Act, landlords ‘may not withhold consent unreasonably’. Should there be a breach in contract, i.e. subletting happens without the landlord’s written consent, the tenants face the risk of being evicted.
The National Landlords Association has found that nearly 50% of tenants who sublet, do so behind their landlord’s back. Many of these tenants have taken to Airbnb – the world’s largest online accommodation-sharing marketplace – to secure extra sources of income.
Now, it couldn’t be easier to sublet online…
Airbnb has reported 79 million “room nights” in 2016 and it is expected to grow in popularity, reaching 1 billion by 2025. London is currently the world’s third largest market on Airbnb. Although the city of London sits under a law stipulating that it is not legal to provide temporary sleeping accommodation for paying guests for more than 90 days per calendar year.
Some landlords may not be troubled by the thought of a stranger living on their property without them knowing. However subletting could have repercussions, such as invalidating the terms of the mortgage, as well as some residential landlord insurance policies.
Has all of this information made you wonder how much you really know about the ones renting your property? Read our infographic for more tips and statistics about the topic of subletting.