Introducing Holiday Let Mortgages

• First-Time Landlords welcome.

• We allow borrowers to occupy the property themselves for up to 90 days a year.

• Mortgages are considered on an Interest-Only and Repayment basis.

• Maximum 75% Loan to Value.

• Minimum personal income requirement of £20,000 (single or joint).

• Minimum Loan size £25,000, maximum loan size £1m.

• Minimum property valuation £150,000.

• Maximum age of the applicant(s) that we will consider is 90 years old (at the end of the mortgage term).

• A valid Energy Performance Certificate (EPC) must be provided at an application stage and must meet a minimum rating of E.

• Must be a standard residential furnished property that is suitable for owner occupation and has no title, local or occupancy restrictions. Relevant planning consents must be in place. Leasehold properties will only be considered where the lease explicitly permits short-term letting or Holiday Let activity.

• Must qualify as a furnished Holiday Let under HM Revenue & Customs requirements.

• Lending on holiday parks, complexes, B&Bs, and Airbnb is not permitted.

• A holiday letting agent must be in place. The property must be rented under a Licence Agreement. ASTs are excluded.

• The applicant must own their own residential property.

• Not available for Portfolio Landlords.

• The letting agent should confirm in writing a high, mid and low expected seasonal rate. 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 the rate of 7.50%. For like-for-like remortgages the net annual rental income must provide a minimum of 125% rental coverage based on the rate of 6.50%.

• 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.

Weekly Rental Income

30 Weeks Occupancy

Total

High Season

£1,200

X 30

£27,000

Mid Season

£900

Low Season

£600

Average

£900

Deduct 20% letting agent fees

£27,000 x 20%

£5,400

Net annual rental income

£21,600

Must be equal to or greater than mortgage balance x 7.5% at an ICR of 140%. 

Mortgage balance      x

Pay rate

x       Stress rate

£15,750

£150,000

7.5%

140%