Our Holiday Let Mortgages are designed specifically for businesses looking to acquire or refinance property used for short-term lettings to holidaymakers as part of their commercial operations.
Holiday let mortgages provide dedicated lending facilities for companies, partnerships and limited liability entities that operate residential holiday accommodation as a business.
Unlike standard residential products, these mortgages recognise the unique income profiles and operational characteristics of holiday let businesses, where short-term visitor stays generate revenue through platforms such as Airbnb, Booking.com or direct bookings.
This product is suitable for:
Lenders typically require evidence of a viable business plan, projected revenue and, where relevant, a trading track record to support the application.
Holiday let business mortgages can be used to:
Lenders will assess affordability based on projected gross and net income after operating costs, reflecting the commercial income profile of the holiday let business rather than personal income.
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.
Acceptable customer types include: Sole Trader, Partnership, Limited Company (Ltd) or Limited Liability Partnership (LLP).
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 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.
