Holiday Let mortgages 

Mortgages for residential properties being operated as holiday lets.

Holiday Let Mortgages are available for refinancing or for purchasing new properties.

Products are available for first-time holiday let operators.  Typically, however, 12 months track record is required to be demonstrated by either the borrower or the property itself.

As with Standard B2L Mortgages, it is a single loan per property.

This is a high growth area across the UK and new lenders are entering the market regularly.

Affordability and repayment

Loan affordability is based on measures of gross and net income.  Net income is derived after deducting operating costs.

Interest only and capital repayment mortgages are available.

Ownership Structures

Acceptable customer types include:  Sole Trader, Partnership, Limited Company (Ltd) or Limited Liability Partnership (LLP).

Loan terms and lending criteria

Expect loan to values (LTVs) to be capped at 75%.

Mortgages are offered subject to valuation and completion of security.  Lenders usually insist on the use of pre-accredited solicitors and a valuer which forms part of their pre-approved panel.

Pricing and fees

Pricing of these facilities can vary greatly, and it is often linked to the loan to value (LTV), loan amount and credit quality of the borrower.

2, 3 and 5 year fixed rates are available, as well as variable interest rates for added flexibility.  Most fixed rate products carry early repayment charges.   Arrangement fees can range from 2 – 7% of the loan amount which can be added to the facility.