Can buy-to-let mortgages be used for holiday lets?

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According to FTAdviser.com (November 2017), many lenders have asked brokers to advise their clients that properties with buy-to-let commercial mortgages cannot be used as holiday lets, as this goes against the conditions of the mortgage.

There is currently a boom in the holiday letting market with many Britons holidaying in the UK, and overseas visitors attracted by a weak pound that makes British holidays good value.

Many landlords are tempted to list their properties on Airbnb, especially after tenants leave and the property is vacant. Brokers, however, need to make borrowers aware that most buy-to-let mortgages prohibit holiday lets. If a landlord wishes to change from long-term tenants to holiday lets, then they will need to remortgage the property using a type of commercial mortgage that allows holiday letting.

Lenders often carry out post-mortgage completion checks to make sure that properties are only used for long-term tenants. They can look at the Airbnb website and TripAdvisor reviews to discover if landlords are letting out properties as holiday lets and are in contravention of the mortgage agreement.

Commercial mortgage brokers are expected to warn landlords against using buy-to-let mortgages for holiday let purchases. If a broker arranges a standard buy-to-let mortgage and knows that the landlord will use the property for holiday lets, they risk being struck off the lender’s broker panel and will not be able to deal with that lender again.

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