The staycation market is booming – have you tried to book anywhere in the UK this summer??
As a specialist mortgage supplier, we have seen a significant increase in enquiries and applications for Holiday Let mortgages. So to keep you ‘in the know’, here are some common questions & answers that will help you gain more knowledge and source the right mortgage for holiday or short term lets:
Are rates cheaper than BTL rates?
The market is not quite as competitive as BTL yet but rates are dropping, the lowest rate is 3.19% and the highest is 5.49%. As always the rate available will depend on the specific clients' circumstances. Please call us for up to the minute rates.
What’s the maximum LTV available?
LTV varies up to a maximum of 75%.
What if the client wants to stay in the property?
This is one of the key differences between a standard BTL property and a Holiday Let, some lenders will allow the clients to holiday in the property for up to 60 days per year.
Any experience needed?
In most circumstances, lenders will either want the client to be a homeowner, a landlord or achieve a minimum income. Most lenders will not require the client to own an existing Holiday Let.
Are there tax advantages to owning a Holiday Let?
If this is set up as a Furnished Holiday Let (FHL) it can provide the owner with certain tax advantages over a standard BTL property. There are certain requirements a Holiday Let property needs to meet to be classified as a FHL, specific to availability, bookings and level of furnishings.
How do lenders look at affordability?
They broadly sit in two camps – Some lenders simply rely on the valuer to provide as standard AST rental income, as with BTL lending.
Other lenders will look at the actual holiday rental income of the Holiday Let property. Typically a lender will take an average 30 week occupancy split between low, mid and high season.
What about types of property & other important aspects?
Like any BTL enquiry you need to establish where the property is situated, how many bedrooms and if a MUB. Most lenders are happy with up to 6 bedrooms. Some Holiday Let properties may carry restrictions, such as it cannot be used as residential. If this is the case please highlight from the outset as it will influence which lender we approach.
As with many specialist loans, there are a great number of options available through our panel of lenders. The team at Complete FS are ready to help you place your case successfully, you can call us on 023 8045 6999 option 2.