MORTGAGES
A holiday home let is designed for those with a property (or properties) they’d like to let out on a short-term basis as holiday accommodation.
It can be an attractive investment as it means you’ll be able to charge more than a regular buy-to-let. It also means you can use the property for holidays yourself.
Holiday Let, Buy to Let –
What’s the Difference?
A holiday let mortgage is for people who want a property they can rent out on a short-term basis, while buy-to-let mortgages are for those who want to rent over a longer term.
Because the property isn’t let out year-round like a buy-to-let property, it means affordability will be calculated differently to allow the lender to consider the rise and fall of rental income depending on high or low season.
Holiday let mortgage criteria
The maximum a holiday home let mortgage is usually 75% of the property’s value, compared to the 80% with a buy-to-let mortgage. Due to the short-term nature of the letting, it’s a riskier option for the lender, so you’ll need to secure a deposit of at least 25% of the property’s value.
You’ll also need to remember that there will be a maximum period that you can stay in the property per year, which can range from 2 to 3 months.
If you’re looking to rent out your property via Airbnb, this can be covered by the mortgage.
What type of property?
To be able to raise the finance, you will need to be able to show the property can yield a minimum rental income – this can vary between lenders.
Most lenders use a letting agent letter to confirm the potential rental income using an average of the projected low, mid and high season weekly rental yields, typically multiplied by an assumed occupancy level of 26 weeks and divided by 12 months.
As for the type of property… we are renowned for being able to find quirky deals, so don’t let the type of property hold you back!
Helping you earn a healthy income
Holiday let mortgages are considered a specialist type of lending, due to the short-term basis of letting, so you won’t find one as easily as a standard mortgage. With some holiday rentals making more in a single week than a traditional long-term rental does in a month, becoming a holiday let landlord could earn you a healthy income.
It’s worth noting that holiday home let mortgages are only for properties within the UK.
We will try our upmost to find you a deal to suit your needs. We use main stream lenders such as Leeds and Principality, along with other less well known lenders such as Hodge, Market Harborough and Darlington Building Society. We will use whoever we can to find you a great deal.
Our Awards
