A message from Holiday Let Mortgage Brokers | Holiday lets share similarities with traditional rental properties, but they differ in one key area: tenancy length. Unlike standard buy-to-let properties, which are typically rented out on long-term agreements, holiday lets operate on a short-term basis, catering to holidaymakers and temporary guests. Because of this, lenders view them as higher risk, which means holiday let mortgages are more specialised and require tailored financial solutions.
It’s important to understand that a standard residential mortgage cannot be used for a holiday let property, even if you intend to use it for your own vacations. Most lenders will allow you to use the property personally for a limited period, typically at least 90 days per year. Exceeding this can invalidate the terms of your mortgage.
To qualify as a genuine holiday let in the eyes of mortgage lenders and HMRC, the property must meet specific criteria:
- It must be available for holiday letting for at least 210 days per year.
- It must actually be let out to paying guests for at least 105 days annually.
Whether you’re passionate about UK staycations or seeking income through short-term rentals, we’ll support you every step. Securing a holiday let mortgage isn’t just about experience; it requires a tailored financial approach based on your objectives.
Success depends on a thorough understanding of the market, awareness of UK regulations, and access to lenders who are familiar with short-term rental criteria. Whether you advise first-time buyers entering the holiday let market or support landlords expanding portfolios, expert help is essential.
This niche requires knowledge of seasonal income, occupancy levels, and realistic property management expectations.
Why Holiday Let Mortgage Brokers Need Specialist Advice
The holiday let market operates differently from standard buy-to-let or HMO lending. Lenders apply separate criteria due to the way holiday properties generate income. Occupancy levels can change throughout the year. Income is often seasonal rather than consistent. This affects how affordability is assessed.
Working with experienced holiday let mortgage brokers helps ensure your application is structured correctly from the outset.
What a Holiday Let Mortgage Broker Needs to Consider
A specialist holiday let mortgage broker must understand how lenders view short-term rental income. This includes how projected income is calculated and whether evidence from letting agents is required. Some lenders accept Airbnb-style short lets. Others restrict usage or require minimum occupancy periods. Knowing which lenders allow part-time personal use is also important.
Ownership structure matters. Brokers should explain the differences between personal ownership and limited company structures. This includes how tax treatment and lender availability may vary. First-time holiday let buyers also need guidance on local rules. This may include planning consent, licensing requirements, and appropriate insurance cover.
Important Information for Holiday Let Buyers
Holiday let mortgages are not regulated in the same way as residential mortgages. Lenders may require higher deposits than standard buy to let products. Interest rates can also differ. Properties must usually meet furnished holiday let criteria. This includes availability for letting and minimum occupancy thresholds.
Using a broker listed on our “Find a mortgage adviser” service helps ensure you receive advice suited to your circumstances.
The Growth of Holiday Letting in the UK
Holiday letting has become increasingly popular across the UK. Coastal and rural areas such as Cornwall, Devon, and Cumbria continue to attract strong demand from short-term visitors. To learn more, visit our Why move to Cornwall page. Many landlords are exploring holiday lets as an alternative to traditional rentals. This is driven by changing tenant demand and evolving tax rules.
However, increased demand has also led to tighter local controls in some areas. Buyers should always check local authority requirements before proceeding.
Getting the Right Advice
Holiday let lending is a specialist. Not all lenders operate in this space. Using Connect Experts allows you to access advisers with relevant experience in short-term and furnished holiday let mortgages.
You can also explore our commercial mortgage brokers if your property falls into a mixed use or complex ownership structure. Independent advice helps you understand risks, costs, and long-term affordability.
What Makes Holiday Let Mortgages Different?
Buy-to-Let Affordability Calculator
Enter your details below to estimate the mortgage amount, rental income, and coverage.
Holiday let mortgages differ from standard buy-to-let products in several key ways that affect both eligibility and affordability.
Income Potential, Not Just Rental Agreements
Lenders assess projected income during peak, mid, and off-peak periods. Some accept letting agent projections; others require historical booking records.
Stress Testing and Rental Coverage
Expect coverage ratios of 125% to 145%. Many lenders use average seasonal occupancy instead of assuming full-month rentals.
Location-Specific Lending Criteria
Holiday homes in tourist areas or approved holiday zones often receive better valuations. Some lenders avoid areas with Article 4 restrictions or local bans on second homes.
First-Time Holiday Let Landlords
Clients with no prior letting experience may have fewer lender options. A high personal income or using a holiday let management service can help secure approval.
Types of Holiday Let Mortgages Available
Standard Holiday Let Mortgages
Standard holiday let mortgages suit part-time landlords and owners converting a second home into a short-term rental. These products usually allow personal use for a limited number of days each year, typically 90 to 120 days.
Lenders typically assess affordability using projected rental income alongside personal income. This option can be suitable for lifestyle investors seeking flexible ownership.
Professional Holiday Let Mortgages
Professional holiday let mortgages are designed for landlords operating multiple holiday properties. These products are commonly used by portfolio landlords with properties in established UK holiday locations.
Lenders may apply business-style affordability assessments. This can include higher stress testing and the use of platform-based income from providers such as Airbnb or Sykes.
Advisers listed on our holiday let mortgage brokers directory can help match you with lenders familiar with short-term letting models.
Limited Company Holiday Let Mortgages
Limited company holiday let mortgages are now available through a growing number of specialist lenders. These are often used by investors focused on long-term tax planning.
Properties are commonly held within a special-purpose vehicle. Lenders may require personal guarantees from directors and detailed company accounts.
Our limited company mortgage advisers can support with structuring applications and managing lender underwriting requirements.
Refinance and Equity Release Options
Holiday let owners may refinance to secure a better rate or raise funds for property improvements. Capital raised can also be used toward additional purchases.
Some lenders will consider remortgage applications based on forecast holiday let income rather than historical figures. This can be useful for recently converted properties.
Speaking with a mortgage adviser experienced in holiday let refinancing helps ensure projections meet lender expectations.
Important Tax and Lending Considerations
Properties qualifying as Furnished Holiday Lets may benefit from different tax treatment compared to standard buy-to-let properties. Eligible FHLs can access capital gains tax reliefs, claim capital allowances, and deduct mortgage interest as a business expense. This differs from traditional buy-to-let rules following Section 24 changes.
Tax rules are subject to change. Independent tax advice should always be sought before proceeding.
What Holiday Let Mortgage Brokers Should Know About Lender Criteria
Some lenders thoroughly review a borrower’s portfolio, including income from other rental properties or employment.
Experience Matters but Not Always
While many lenders prefer at least 1–2 years’ letting experience, others focus on income strength, credit history, and using a holiday let management company.
LTV and Income Thresholds
- Max LTV typically ranges from 60% to 75%
- Minimum earned income: often £20,000–£25,000 per annum
- Accepted income from bookings: 30–45 weeks of occupancy per year
Market Insight for 2025
- Average gross yields on UK holiday lets were 9.2% in 2024
- Popular UK destinations reported booking increases of 18–22% year-on-year
- Lenders offering bespoke packages for holiday lets rose by 25%
First-Time Holiday Let Buyers: Start Strong
We specialise in helping newcomers confidently step into the world of holiday letting. From understanding FHL tax breaks to choosing properties in high-demand areas, we offer:
- Step-by-step mortgage guidance
- Help choose between self-management vs. letting agents
- Tips on occupancy optimisation and avoiding common pitfalls
- Insights on yield potential in top-performing regions
Why Work With Us as Your Specialist Holiday Let Broker
You’re not just helping clients find a mortgage, you’re unlocking lifestyle investments and profitable income streams. Our team brings:
- Access to 200+ specialist and mainstream lenders
- In-depth market knowledge of holiday zones and rental platforms
- Case management from application to completion
- Help with planning, insurance, and holiday property compliance
💡 Did You Know?
Some lenders now offer rolling facilities for holiday let owners. These allow flexible equity withdrawals without full remortgaging, making them perfect for short-notice property purchases or renovations.
Ongoing Support for Your Clients’ Holiday Let Growth
Our team supports brokers and landlords alike with:
- Pre-lender Reviews: We assess the property’s income potential and ownership structure before application.
- Annual Portfolio Reviews: Spot refinance opportunities or restructuring needs early.
- Regulatory Assistance: Help with local authority licensing, insurance, and planning checks.
- Rate Watch & Early Remortgaging: Stay ahead of interest rate shifts and avoid SVR traps.
Our Holiday Let Mortgage Brokers
Driven By What You’ve Been Exploring
FAQ: Holiday Let Mortgage Brokers
| Question | Answer |
|---|---|
| What is a holiday let mortgage? | A holiday let mortgage is a loan designed for properties rented out as short-term holiday accommodation. It differs from a standard buy-to-let because the property is let to holidaymakers rather than long-term tenants. |
| Who can apply for a holiday let mortgage? | Most lenders accept applicants who already own their main residence and can demonstrate sufficient income. Both individuals and limited companies can apply, depending on lender criteria. |
| How is a holiday let mortgage different from a buy-to-let mortgage? | Holiday let mortgages are assessed on projected seasonal rental income rather than standard monthly rent. Lenders often allow greater flexibility, as income can vary throughout the year. |
| Can I use my holiday home personally and still get a mortgage? | Yes. Many lenders allow owners to use the property for personal stays, provided it is available for rental for a minimum number of weeks each year. |
| What deposit do I need for a holiday let mortgage? | Most lenders require at least a 25% deposit, though some may ask for more depending on the location and property type. |
| Are there specific locations where lenders prefer holiday lets? | Popular holiday destinations such as Cornwall, Devon, the Lake District, Wales, and coastal towns in Scotland tend to be more attractive to lenders due to strong rental demand. |
| How is affordability calculated for a holiday let? | Lenders assess affordability using projected rental income from a letting agent, factoring in seasonal occupancy rates and local tourism trends. |
| Can I get a holiday let mortgage through a limited company? | Yes. Many investors use limited company structures for tax efficiency and to manage multiple holiday let properties under one business. |
| Are interest rates higher on holiday let mortgages? | Rates can be slightly higher than residential mortgages due to the specialist nature of the lending, but competition among lenders has made rates more accessible. |
| Can I refinance my existing property into a holiday let mortgage? | Yes. You can remortgage an existing property into a holiday let if you meet the lender’s eligibility requirements and can demonstrate sufficient rental demand in the area. |