Holiday Let Mortgages

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What Is a holiday let mortgage?

Finding the right mortgage for your property can be complicated, but if you’re a landlord who is looking to rent out your property on a short-term basis, a holiday let mortgage could be your perfect solution. Properties rented out on a short-term basis through sites like AirBnb, Booking.com, or a holiday let agency all potentially fit the criteria for a holiday let mortgage.

Read on to learn if a holiday let mortgage is the right mortgage for your rental property.

Is a holiday Let a good Investment?

Investing in a holiday property is a smart way to make your money work for you. Owning a holiday home can be a fantastic and rewarding experience that generates additional wealth for you in the form of monthly rental payments. Investing in a holiday property can be a great way to generate income, supplement your savings, or increase your cash flow.

It’s not uncommon for our clients to see yields of up to and over 10 percent. Unlike other forms of investment, real estate tends to weather inflation well because homes typically appreciate over time.

Current market conditions are proving to be opportune for those considering investing in a holiday rental property. A recent study found that there has been a 49 percent reduction in available properties to rent in the UK. Despite this decrease in availability, house prices continue to rise at a breakneck pace, increasing every month to 6.8% overall so far this year.

As the availability of rental properties has decreased with the spike in housing prices, making now an even more lucrative time to invest in a holiday rental property.

Can I airbnb my house if I have a mortgage?

If you currently have a standard buy to let mortgage and have decided you want to rent your investment property through airbnb then you need to seek the lenders permission. If you check your mortgage contract with the lender you will probably find that a standard buy to let mortgage only allows you to let your property on a standard 12 month assured tenancy agreement and a short term let would not be acceptable.

Always check with your current lender in the first instance. There are options available with some lenders who have specific short term let products available for you

Speak To Hemal

I have successfully assisted hundreds of people get their dream mortgage. With many years of experience as a Mortgage Broker. I have come across all types of clients who have trusted me to guide them through what can feel like a daunting process. I provide and lead my clients through this entire process with a precise, attention to every detail, in an effort to make sure their mortgage plans are being met with clarity and proficiency.

Do you need a buy to let mortgage for airbnb?

Absolutely! If you own an investment property and you rent through airbnb then buy to let lenders can help. Lenders class these products as holiday let mortgages. Some lenders would want to see that the property is being managed by a serviced accommodation agency and some lenders would be ok with self managed. It’s best to speak with a broker who specialises in short term serviced accommodation mortgages. Reach out to one of our brokers to see what options are available to you.

Steps to approval for a holiday Let mortgage

Not all lenders offer holiday let mortgages, but once you find one who does, the steps to approval are simple and easy. The way that lenders assess how much they will lend you depends on their own, individual criteria, but The Times has highlighted a few benchmarks to keep in mind below:

A minimum income of between £20,000 and £40,000 is a typical requirement.
Borrowers often wonder, “how much can I borrow on a holiday let mortgage?” Minimum and maximum mortgage amounts typically range from £25,000 to £750,000, but can go higher. Most lenders set a maximum loan to value (LTV) ratio of 70-75 percent, but it can go higher. Your interest rate and deposit will depend on additional factors.
Lenders typically ask borrowers for an expected rental income estimate to calculate mortgage rates with low and high seasons considered.
Lenders may have a minimum age requirement (usually 21 years old)
Holiday let mortgages cannot be used for main residences, and some lenders limit the number of holiday lets you can own.

Learn more about the steps to get approved for a holiday let mortgage by contacting a broker.

Apply for a holiday let mortgage

Ready to boost your income and invest in that holiday rental property you’ve been dreaming of? Contact our team today to get started!