With the rise of AirBnB and other online portals that allow us to easily rent our homes we are seeing more demand for mortgages for holiday lets. AirBnB is a very real threat to the hotel industry with people preferring to rent a home for themselves rather than just a hotel room.
Mortgage lenders are adapting and some, but not all, lenders have adapted their lending criteria for mortgages for holiday lets to allow AirBnB as a method of renting out your holiday let.
Regardless of how you will rent out the property we have a plethora of lenders that offer mortgages on holiday lets that you will both live in and rent out.
Fox Davidson are a specialist property finance broker and one our areas of expertise is securing mortgages for holiday lets. Whatever your intentions for your holiday home are we have lenders that will lend you the finance you need.
Holiday Homes Uses
- 2nd residential holiday home
- Holiday Lets
- Mixture of own use and holiday let
Fox Davidson secure lending above £200,000 and work with lenders from the whole of the market, we are not tied to a panel of lenders. We work with high street banks, building societies, private banks and broker exclusive lenders to secure market leading holiday let finance for our clients.
- Up to 90% loan to value
- Interest only and Repayment options
- Loans from £200,000 with no upward limit
- Lending in England, Wales & Scotland
- Personal earned income above £30,000
- Lending based on income or annual rent
How much can I borrow?
We can utilise lenders that work in one of 2 ways. Firstly, we can use lenders that will work off your UK taxable income. Lenders will deduct any existing mortgage and loan repayments form your income and then work out how much they can lend you. Typically, we can secure 5 x your gross annual income (after deduction of debt payments). For Ltd company owners we can use your net profit before tax plus salary to gain a better lending figure.
Secondly, there are lenders that will only work off the rental income that the holiday let will achieve. The lenders typically ask for an ARLA letting agent to confirm the annual rent (taking account of low and high season). The rent will need to be approx. 130% of the mortgage payment at a nominal rate of say 5%
WORKING EXAMPLE – RENT OF £2,000 pm x12 = £24,000 PA. /130% /5% = £369,000 LOAN.
Which lenders offer holiday let mortgages?
There are lots of small building societies that lend on holiday lets and a handful of the banks too. Other than that, it is specialist buy to let lenders that occupy the mortgage for holiday let market. When we discuss you options with you we will match your situation to the lenders with the best terms for your situation.
To discuss mortgages for holiday homes with a broker at Fox Davidson please complete the enquiry form or why not call us. We look forward to working with you and securing the holiday let finance you need.