Holiday Lets

Are you looking to invest in a holiday home in a UK coastal town or a tourist hotspot?

Apart from providing a useful second home for the buyer, Holiday Lets also have a variety of tax advantages. We can help you make the most of this competitive market so that you get a solid return on your property investment.

With the Holiday Let mortgage predicted to see a 4% year-on-year growth, now is a great time to make a picturesque investment. However, the mortgage process can be more difficult to navigate than that of a residential property. We can take the stress and hassle out of your Holiday Let enquiry. We can help you decide on a specialist mortgage with a large deposit or advise you on remortgaging your residential property in order to release equity.

Are Holiday Let mortgages the same as Buy to Let (BLT) mortgages?

No. A BTL mortgage contract will have different conditions concerning the type of occupancy, and the maximum loan size is also calculated differently. For Holiday Let mortgages, a local or national holiday letting agency will provide a projected letting income which will be passed on to the lender and surveyor. The surveyor will determine the value and suitability of the property and the credibility of the projection. You will then be required to provide a sizeable deposit of approximately 25%, acquired either through savings or non-borrowed means (E.G. releasing equity from other properties).

What are the benefits?

• Tax Advantages

Unlike BTL investments, a Furnished Holiday Let boasts extensive tax advantages. You may be able to claim Capital Gains Tax reliefs for Traders and Capital Allowances for the likes of furniture.

• Restricted Tenancy Rights

Holiday makers that rent your property tend to pay their rent in advance. Also, they don’t have the occupancy rights that tenants hold on BTL properties. This reduces the risk of having to evict difficult tenants.

• Marketing is manageable and stress-free 

With the surge of holiday homes on websites such as Airbnb and HomeAway, your property will quickly be easily searchable with the platforms offering an easy booking system. All you need to worry about is responding to customer queries and ensuring that your holiday home is shown in the best light possible.

• Using your holiday property yourself 

From a financial point of view, a holiday property can make thousands of pounds per year and be a lucrative enterprise. But you can also benefit from this investment being a home from home during the off-peak season.

Are there any disadvantages?

• Higher interest rates

Generally, because the Holiday Let sector is niche, lenders tend to perceive this type of mortgage as being higher risk, meaning that the range of lenders offering these loans is narrower and interest rates are higher.

• Utility bills

Unlike standard Buy to Lets, it is up to you to pay the utility bills and Council Tax, rather than the tenant.

• Off-peak seasons

Because holiday letting tends to be seasonal, after the busy periods during summer and school holidays, there is a large part of the year where your property will be unoccupied.

• Cleaning and changeover commitments

Running a holiday home is a big commitment. If you want more control over the management and maintenance of your property, you may choose to deal with all aspects of changeovers, cleaning and emergencies, dependent of any letting agencies. This can be extremely time consuming.

Because this is a specialist sector and interest rates vary across lenders, it is important that you seek out professional advice in order to make your Holiday Let a success. Contact us today to arrange a consultation with one of our experienced advisors.