We have all seen significant increases in property purchases for holiday lets across the UK, especially over the past few years. Even more so in holiday destinations, such as here on the Isle Of Wight. However, mortgage lenders have traditionally shied away, and most of the big UK lenders are still not offering specialist holiday let mortgages.
With Airbnb and Booking.com becoming the go to sites for customers looking for a UK break. This has attracted landlords to advertise properties on a short let basis, with more convenience and profitability than ever before. This type of accommodation is showing no signs that demand is easing up either.
So, what kind of mortgage do you need for a holiday let? How much deposit will you require? And the all-important question, how can you access these specialist products?
Myth busting time.. you cannot use a standard Buy To Let (BTL) mortgage for a holiday let!
BTL lenders will insist on an Assured Shorthold Tenancy (AST) being in place. This may be for a period of six or twelve months. This normally required as it provides assurance of consistent rental income throughout the year.
Landlords with holiday lets will not be using an AST; They’ll use short term rental agreements of weeks or even days. Due to the unique income patterns of holiday lets, with demand likely to fluctuate throughout the year and also daily or weekly rates varying based on the holiday seasons, landlords will require a specialist holiday let product.
What about a deposit?
You are likely to require a higher deposit than that of a standard BTL mortgage. It varies from lender to lender, however a minimum of 25-30% will be required and even up to 40% to access some lenders.
How do I find a holiday let mortgage?
Even with the holiday let market growing, most of the big lenders are still not offering these specialist products for landlords wanting to invest in this type of property. Therefore, it is not easy for customers to locate lenders offering such mortgages. This is why most people utilise the skills of a mortgage broker.
We know the market well, having the knowledge of each lenders strengths and criteria quirks puts us in the position to offer our expertise. Which in turn saves you time, money, and having the confidence you have been matched to the most appropriate lender and product specific to your personal situation.
Whether you’re looking for a holiday let mortgage here on the Isle of Wight, Cornwall or the West Coast of Scotland we’re here to make sure you find the very best products available.
We hope this blog has given you some insight into Holiday let Mortgages. Should you wish to discuss the possibility of a Holiday let purchase or remortgage, please contact Liam on 01983 685 035 or email Liam@robinpartnership.co.uk. You could also find our more general information here.
Written by Liam Cattermole
Now it’s time for the legal bit: YOUR HOME BE RESPOSSESSED IF YOU DO NOT KEEP UP TO DATE WITH YOUR MORTGAGE PAYMENTS
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The information in this blog is only valid for the date it is written.