Several lenders have specialist commercial mortgages for people to buy property that they intend to let out on a short-term basis to holidaymakers. Holiday lets are defined by HM Revenue and Customs as
furnished holiday lets and must be worth at least £150,000 to receive favourable tax treatment.Lenders will allow the owner to occupy the property for up to 60 days a year. When assessing loan applications, lenders will consider the expected rental income, but can also take into account the borrower’s personal income and other assets. Lenders will lend around 70% of the value of the property. Fixed interest rates are available for periods of around two to three years.
Largely due to uncertainty about Brexit, many investors are reluctant to invest in properties outside of Britain. The good weather during this summer has meant that many British people are holidaying in the UK rather than go overseas. This has meant a high demand for holiday lets, but obviously future summer weather is unpredictable.
Owners of holiday lets can administer the property and find tenants themselves, or use agencies that will manage the property and arrange cleaning in between tenancies. Online agencies such as Airbnb can also be used to find tenants.
Holiday lets are a way for buy-to-let landlords to extend their property portfolios. As well as commercial mortgages to purchase property, bridging loans can be used to renovate older property to the high standards that holidaymakers expect. A mortgage broker can arrange finance for holiday let landlords.
