Holiday Let Finance Explained
Holiday Let Finance refers to the type of mortgage or loan used to purchase
properties that are intended to be rented out on a short-term basis for
vacation or holiday purposes. These properties are typically let to guests for
short stays, ranging from a few days to several weeks, and are usually located
in popular tourist destinations or areas with high demand for vacation
rentals.
Holiday let finance is specifically designed to cater to the needs of property
landlords who wish to purchase properties for short-term holiday rentals. This
type of property financing can differ from traditional buy-to-let (BTL)
financing, as it comes with unique features that account for the seasonal and
fluctuating nature of holiday let income.
Holiday lets are usually marketed through holiday rental websites (such as
Airbnb, Booking.com, or Cottages.com) or directly through property management
companies.
The location of the property is crucial. Properties in high-demand tourist
areas or destinations with a steady stream of visitors (such as coastal
regions, popular cities, or near major attractions) are more likely to secure
favourable financing.Higher Rental Yield Potential:
Holiday lets can offer higher rental yields compared to traditional long-term
rentals, particularly in popular tourist destinations. This is due to the
premium rental prices that can be charged for short stays.
Holiday Let Restrictions
We have access to a range of Holiday Let lenders from different Bank and
Building Societies. Building Societies are often more likely to lend on
properties with Holiday Let restrictions compared to more traditional lenders.
Rental Income
It is important to be aware certain lenders will base the Rent on either the
Holiday Let Rental Figures or instead using the Lower AST figures (used when
the property is to be let on an indivudual basis). You will need to know the
High, Medium & Low weekly rental income amounts for your Holiday Let. This can
easily be obtained from a local Holiday Letting agent.
Limited Company
Did you know you can also buy using a SPV Company which could save you
thousands (Tax advise is recommended)