Holiday Let Mortgage
- Expert guidance for both new and experienced landlords
- Advice available seven days a week
- See if we can help you find the right deal
Get in Touch
On this page (click arrow to expand)
What is a holiday let mortgage?
A holiday let mortgage is for people looking to finance a property intended to be rented out to tourists on a short-term basis.
This is different to a holiday home or second home mortgage, which is reserved for properties used exclusively by you, your family, and your friends.
What are the differences between a holiday let mortgage and a buy to let mortgage?
A buy to let mortgage is solely for houses or flats rented to paying tenants on a long-term basis, where the tenants use the property as their home. In contrast, holiday lets are exclusively for short-term rentals for tourists.
Holiday lets are becoming more attractive because they can potentially generate more money compared to regular buy to let properties, often charging per night. Furnished holiday lets may also have tax advantages.
However, there are additional considerations such as Stamp Duty, council tax liabilities, and utility payments for your holiday let. It’s advisable to speak to a tax advisor for detailed information.
Is it hard to get a holiday let mortgage?
Getting a holiday let mortgage can be more challenging compared to securing a residential or buy to let mortgage, primarily due to how lenders assess rental income and consider the property’s location.
Can any property qualify for a holiday let mortgage?
Traditionally, holiday lets needed to be in typical tourist destinations to ensure a steady stream of rental income, something lenders may still want to see.
Lenders generally don’t like properties on holiday or caravan parks. Properties subject to usage restrictions – for example, if it is written into the deeds that it has to be a holiday let – typically aren’t acceptable. This is because they are harder to sell if the lender has to repossess.
In addition, properties which are temporary or moveable aren’t usually deemed suitable security.
Is there a minimum income requirement for a holiday let mortgage?
Lenders often impose a minimum income requirement to ensure you can cover the monthly mortgage payments, particularly during periods when the property might be empty, such as in low season. Minimum income requirements typically start from £20,000.
Why The Mortgage Store Chorley?
Exclusive rates you won’t get directly from lenders
A dedicated point of contact from initial enquiry right through to completion and beyond
Appointments seven days a week, to best suit your schedule
Ongoing rate monitoring until completion as standard
Chat with our expert advisor
Do I have to declare rent from my holiday let to HMRC?
Yes, rental income is taxable, and needs to be declared on an annual tax return. HMRC conducts checks to find out if you’re avoiding paying tax, so hoping it will go unnoticed could leave you open to prosecution.
Can I use the property myself?
Yes, you can. The property will need to be available to tourists for the majority of the year, however. Lenders may impose restrictions on the number of days in a year that you and your family can use the property.
Can I live permanently in my holiday let?
No. If you need a mortgage on a property you live in, it has to be a residential mortgage.
Holiday let mortgages usually let you stay in the property, as long as it doesn’t exceed a certain number of days each year. The property should be available to tourists for the majority of the year.
Can I turn my house into a holiday let?
If you are thinking of turning your house into a holiday let, you will likely need planning permission first due to change of use. Speak to your local council or planning department.
Any existing mortgage on the property needs to be changed to a holiday let mortgage. Be aware of any Early Repayment Charges and exit fees on your current deal.
Can I let the property on AirBnB?
It depends on the lender. Some will be happy with this whereas others won’t let you do it.
If you intend to list the property on websites such as AirBnB, inform your advisor at the outset so they can research a suitable lender. Some lenders will insist on the property being marketed by a management company alongside AirBnB listings.
Do you have a question?
How much deposit do you need for a holiday let mortgage?
You usually need a minimum deposit of 25% of the purchase price. Depending on personal circumstances and lender criteria, a larger deposit may be necessary.
Having more than 25% as a deposit could result in more options.
How much can I borrow on a holiday let mortgage?
The amount you can borrow is typically determined by the potential rental income of the property.
Since rental income can vary seasonally, lenders calculate based on the average weekly rent across high, medium, and low seasons.
They assume the property will be rented for a certain number of weeks in the year and empty for the remainder. The average may therefore cover 30 weeks rather than 52. You may have to get estimates from registered holiday lettings agents.
Lenders are also likely to assess your personal income and expenditure to make sure you can afford the payments if the property is empty for a while.
How can The Mortgage Store Chorley help with holiday let mortgages?
Looking to invest in a holiday let property? Our experienced mortgage broker is here to guide you through the intricacies of securing the perfect holiday let mortgage.
We understand the unique challenges and requirements that come with this type of investment. By working with us, you gain access to a wealth of knowledge and a network of lenders specialising in holiday let mortgages. We’ll navigate the market on your behalf, sourcing competitive rates and structuring deals tailored to your specific needs.
Whether you’re a first-time investor or expanding your property portfolio, our broker streamlines the process, offering expert advice and support every step of the way. Let us help you turn your dream of a holiday let property into a profitable and fulfilling reality.
Some types of holiday let mortgages are not regulated by the Financial Conduct Authority.
