A Holiday Let mortgage is for a client who is looking to borrow money on a property that will be let out to the tenants on a short term basis for holidays, usually for no more than two or three weeks at a time.
It differs from a Holiday Home mortgage, where you borrow money to buy a second home that only you will use. Please refer to our residential lending criteria.
We allow borrowers to occupy the property themselves for up to 90 days a year.
We assess Holiday Let affordability using an average of the high, mid and low expected seasonal rental income. A reputable holiday letting agency must provide confirmation in writing. We’ll then take an average of these seasons over a 30 week period to calculate the annual rental income. Agent’s letting fees should be deducted (or assumed as being 20% of gross rents if not available or confirmed). The net annual rental income must provide a minimum of 140% rental coverage based on 5.5%. 125% for like-for-like remortgages.
Whilst we make our assessment based on the rental cover please note we have a minimum personal annual income of £20,000 which can be single or joint.
For Existing Holiday Let: Either existing trading figures in the form of certified accounts, a letter from the holiday letting agent confirming gross annual income for last 2 years, or SA100 tax document can be used.
Our Holiday Home mortgages are currently only for applicants who currently owned their residential homes. We do welcome applications from First Time Landlords though.
No. Long-term tenants fall under the category of the Buy to Let mortgage as tenants will be using the property as their main residence rather than a short term holiday.