Holiday let market booms as rules are relaxed

Holiday let market booms as rules are relaxed
As uncertainty over foreign travel continues, demand for UK holiday lets is soaring. If you’re planning to rent out a property, make sure you don’t fall foul of mortgage rules.

Holidays within England are permitted, so six people from multiple households, or any number from two can now stay in self-contained holiday accommodation, prompting a boom in bookings.

Holiday lets can prove very lucrative for owners, and as furnished holiday lets can be treated as a business, they’re able to benefit from tax relief on mortgage interest.

However, owners of holiday lets must notify their mortgage lenders of their plans to rent out their properties, as standard residential mortgages don’t allow this. Even if you’re only renting out a room of your main home, you must obtain ‘consent to let’ from your lender, who may charge you a higher rate of interest.

If you don’t notify your lender that you’re letting out your property as holiday accommodation you’ll be breaking the terms of your mortgage. It’s therefore essential that you arrange a holiday let mortgage for any property you plan to rent out as holiday accommodation.

About holiday let mortgages

Holiday let mortgages aren’t the same as Buy to Let mortgages, and lending criteria can often be stricter as they’re seen as a less reliable source of income.

Only a few lenders offer holiday let mortgages, so it’s worth seeking professional advice on the best option to suit your individual circumstances.

You’ll need to put down a significant deposit, typically 25% of the property value or more, if you’re planning to purchase a holiday let property (or convert your existing property to a holiday let), and lenders will require evidence that you’ll be able cover mortgage payments during periods your property isn’t let out.

You can compare holiday let mortgages and see the deals you may qualify for here.

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