Leasehold covenants and mortgage consent: the checks before any short let

Most conversations about short lets in the UK start with regulation: London's 90 nights, Scottish licences, the Welsh register. Yet the projects we see fail most often fall at an earlier hurdle, one that sits in the owner's own filing cabinet. A lease clause, a mortgage condition or an insurance exclusion can make a short let a breach of contract before any council has an opinion. This article, written in September 2026, explains what to look for and how to deal with it.

The lease: three clauses to read line by line

If you own a flat in England, Wales or Northern Ireland, you almost certainly hold it on a long lease, and that lease governs what you may do with it. Three types of covenant matter.

• User covenants. Wording such as "use as a private dwelling house only" or "private residence for one family" is common. It is the clause most likely to rule out short stays.
• Business covenants. Many leases forbid carrying on any trade or business at the premises.
• Alienation covenants. These govern sub-letting, parting with possession and sharing occupation, sometimes with a minimum term for any sub-letting.

Look also at nuisance clauses, rules on who may hold keys and any obligation to tell the landlord's insurer about changes of use.

What the tribunals have decided

Two Upper Tribunal decisions frame the position in England. In Nemcova v Fairfield Rents (2016), the tribunal held that letting a flat for short periods breached a covenant to use it only as a private residence. In Triplerose v Beattie (2020), it went further: short-term occupation by paying strangers was described as the antithesis of occupation as a private dwelling house, because it lacks both privacy and permanence. The same decision shows the nuance, though. A separate covenant against carrying on a business was not breached, because the leaseholder still lived there during the week and the guest use was ancillary to a genuine home. Each lease turns on its exact words.

How a landlord enforces

A freeholder or management company that believes a covenant is being broken will usually write first. In England, before it can serve the notice that starts forfeiture proceedings for most breaches, the landlord needs either the leaseholder's admission or a determination from the First-tier Tribunal that a breach has occurred, under section 168 of the Commonhold and Leasehold Reform Act 2002. Forfeiture of a valuable lease is rare in practice, but injunctions, legal costs charged back under the lease and a tense relationship with neighbours are common. Continuing to let once the issue has been raised is the worst option.

Getting permission the right way

If the lease is restrictive, you can ask the landlord for a formal licence, or for a deed of variation that changes the wording. Expect questions about security, noise, waste and insurance, and possibly a fee and a contribution to the landlord's legal costs. Some landlords refuse outright, particularly in blocks where other residents have complained. In buildings where leaseholders jointly own the freehold, the decision can become a vote of your neighbours, so a clear management plan helps.

In Scotland, flats are usually owned outright rather than on long leases, but title conditions and deeds of conditions can still restrict use, and a short-term let licence does not override them. In Northern Ireland, apartment developments are often run under management company rules that play the same role.

The mortgage: residential terms are not letting terms

A standard residential mortgage assumes that you, the borrower, live in the property. Letting it without the lender's agreement is likely to breach the mortgage terms. The consequences can include a higher interest rate, backdated charges, a demand for repayment and difficulty borrowing in future. Note that consent to let, where lenders offer it, is designed mainly for ordinary tenancies; whether it extends to holiday stays depends on the lender. Some lenders tolerate occasional letting of your own home within tight limits on nights; others do not.

For a property bought to be let to visitors, the normal route is a holiday let mortgage. These products assess the property on expected letting income and come with their own conditions on use, occupancy and management. A buy-to-let mortgage designed for assured shorthold tenancies is not the same thing and may itself forbid holiday letting.

Insurance

Ordinary home insurance generally excludes paying guests. A short let needs cover written for that use, including public liability. In Scotland, licence conditions require buildings insurance for the life of the licence and public liability cover for each stay. If you are in a block, the buildings policy is usually arranged by the freeholder, who may need to be told.

A checklist before you list

• Obtain a full copy of the lease or title and read the user, business and alienation clauses.
• If in doubt, ask the landlord or managing agent in writing and keep their reply.
• Ask your lender whether your current mortgage permits short stays; get the answer in writing.
• Arrange insurance written for short letting before the first guest arrives.
• Only then look at planning, licensing or registration for your nation.

A property that clears these checks starts on solid ground. Tell us about yours; we study every request and tell you honestly whether and how we can help.