Holiday Let Mortgages UK

August 10, 2023
Buy to Let Mortgage

Holiday Let Mortgages UK – Understanding Holiday Let Mortgages in the UK – A holiday let mortgage is a specialist mortgage for a property that is rented to guests on a short-term basis. It is commonly used for furnished holiday accommodation, coastal cottages, rural retreats, city short-stay apartments, Airbnb-style lets and properties in tourist locations.

Holiday let mortgages are different from standard residential mortgages and different from traditional buy-to-let mortgages. Lenders usually assess them using projected short-term rental income, seasonal demand, personal income, deposit size, property location and how the property will be managed.

This guide explains how holiday let mortgages work in the UK, what lenders may look for, how they differ from buy-to-let mortgages, what costs to consider and when it may help to speak with a specialist adviser.

Looking for advice?
Speak with one of our holiday let mortgage brokers to compare advisers who understand short-term rental income, holiday home lending and specialist lender criteria.

What Is a Holiday Let Mortgage?

A holiday let mortgage is designed for a property that will be rented to paying guests for short stays rather than let to one tenant on a long-term tenancy.

It may be suitable if the property will be used as:

A UK holiday cottage
A coastal or rural short-term rental
Airbnb-style accommodation
A serviced accommodation unit
A furnished holiday home let to guests
A short-term rental investment property
A property used personally for limited periods, subject to lender rules

A normal residential mortgage will usually not allow the property to be let to guests. A standard buy-to-let mortgage may also be unsuitable because many buy-to-let lenders expect longer tenancy agreements and regular monthly rent.

Why Holiday Let Mortgages Need Specialist Advice

Holiday let mortgages can be more complex than standard residential or buy-to-let mortgages. The income can change throughout the year, and lenders may want to understand how the property will perform during peak, mid-season and quieter months.

A specialist adviser can help you understand:

Whether the property fits lender criteria
How much deposit may be needed
Whether projected rental income is strong enough
How personal income affects the application
Whether personal use is allowed
Whether Airbnb-style bookings are acceptable
Whether a limited company structure may be considered
What documents lenders may request
Whether remortgaging or bridging finance may be suitable

Holiday Let Mortgage vs Buy-to-Let Mortgage

Holiday let mortgages and buy-to-let mortgages are both used for rental property, but lenders assess them differently.

Area	Holiday let mortgage	Standard buy-to-let mortgage
Rental type	Short-term guests	Longer-term tenants
Income pattern	Seasonal and variable	Usually monthly rent
Lender assessment	Projected income, occupancy and location	Rental cover and tenancy income
Personal use	Some lenders allow limited use	Usually not allowed
Management	Bookings, cleaning, turnover and guest reviews	Tenant management and tenancy agreements
Property location	Tourist demand can matter heavily	Local rental demand matters
Evidence	Letting projections, bookings or platform history	Tenancy agreement or expected rent

Who Can Apply for a Holiday Let Mortgage?

Eligibility varies by lender. However, lenders usually consider your personal circumstances as well as the property’s expected holiday-letting income.

They may consider:

Your income
Your employment or self-employment status
Your credit history
Your deposit
Your existing mortgage commitments
Your landlord experience
Your wider property portfolio
The property type
The property location
The expected holiday letting income
The number of weeks the property may be booked
Whether you will self-manage or use an agent
Whether the property will be personally owned or company-owned

Some lenders may prefer applicants who already own their main home. Some may ask for a minimum personal income. Others may be more flexible if the property has strong projected income or an existing booking record.

How Much Deposit Do You Need for a Holiday Let Mortgage?

Many holiday-let mortgage lenders require a larger deposit than standard residential mortgages. A deposit of around 25% is common, although some cases may need more depending on the lender, property, borrower and income assessment.

A larger deposit may be needed if:

The property has no proven booking history
The projected income is uncertain
The property is unusual or specialist
The property is in a highly seasonal area
The loan amount is high
The applicant has limited landlord experience
The property is bought through a limited company
The lender applies stricter affordability testing

Deposit size matters, but it is not the only factor. Lenders will also review the rental projection, property suitability, borrower profile and overall risk.

How Lenders Assess Holiday Let Income

Holiday let income is not assessed in the same way as standard monthly rent. A holiday let may earn more during peak months, but lower income during quieter periods.

A lender may ask for:

A holiday letting agent projection
Expected weekly or nightly rates
Peak-season, mid-season and low-season estimates
Occupancy assumptions
Comparable local rental evidence
Existing booking records
Airbnb or platform income history
Details of management costs
Cleaning and maintenance cost estimates
Information on personal use
Evidence of local demand

Some lenders may use projected gross rental income. Others may stress test income using their own affordability model. Some may also consider your personal income to check whether the mortgage remains affordable during quieter months.

Can You Use a Holiday Let Yourself?

Some holiday let mortgage lenders allow limited personal use. This means you may be able to stay in the property for part of the year, subject to the lender’s rules.

Personal use can affect:

Mortgage eligibility
Rental projections
Insurance requirements
Tax treatment
Local authority rules
Occupancy assumptions
The property’s commercial purpose

You should always confirm personal use rules before applying. If the main purpose of the property is personal use rather than letting to guests, a different mortgage route may be needed.

Can You Get a Mortgage for an Airbnb Property?

Some lenders may consider Airbnb-style properties, but policies vary. The key issue is not the platform itself. The lender will want to understand whether the property is being used as a genuine short-term rental and whether the income is sustainable.

A lender may review:

The property’s location
Local short-term rental demand
Expected occupancy
Past booking history
Management arrangements
Planning or licensing requirements
Insurance cover
Whether the platform income is consistent
Whether personal use is limited

If you plan to use Airbnb, Booking.com or another short-term letting platform, speak to a broker before applying. They can help identify lenders that may accept this type of income.

Limited Company Holiday Let Mortgages

Some investors buy holiday let properties through a limited company. This can be relevant for landlords, higher-rate taxpayers or investors building a property portfolio.

A limited company holiday let mortgage may involve:

A special purpose vehicle company
Personal guarantees from directors
Company bank statements
Director income evidence
Details of existing company borrowing
A review of the wider property portfolio
Specialist lender criteria
Different rates and fees compared with personal ownership

Tax treatment depends on individual circumstances. You should speak to a qualified tax adviser before deciding whether to buy personally or through a limited company.

If you are comparing ownership structures, visit our limited company mortgage brokers page.

Holiday Let Tax Changes in the UK

Holiday let tax rules have changed. The separate Furnished Holiday Lettings tax regime was abolished from April 2025. This means older information about FHL-specific tax advantages may no longer apply.

Before buying or refinancing a holiday let, consider taking tax advice on:

Income tax
Corporation tax if buying through a company
Mortgage interest treatment
Capital allowances
Capital gains tax
Stamp Duty Land Tax
VAT, where relevant
Local council rules
Licensing or planning requirements

A mortgage adviser can explain lending criteria, but tax advice should come from a suitably qualified tax professional.

Holiday Let Mortgage Costs to Consider

The mortgage is only one part of the cost of owning a holiday let. You should also consider the wider operating costs.

These may include:

Deposit
Valuation fees
Mortgage arrangement fees
Broker fees
Legal fees
Stamp Duty Land Tax
Buildings insurance
Contents insurance
Public liability cover
Furnishing costs
Repairs and maintenance
Cleaning between guests
Utilities
Broadband
Council tax or business rates, depending on the property and rules
Marketing and booking platform fees
Letting agent or management fees
Periods with no bookings

Holiday lets can produce strong income in the right location, but they also carry seasonal risk. A cautious forecast is usually better than relying only on peak-season income.

What Documents Might You Need?

Preparing documents early can help avoid delays. Lenders may ask for different evidence depending on the case.

You may need:

Proof of identity
Proof of address
Income evidence
Bank statements
Existing mortgage details
Deposit evidence
Credit commitments
Property details
Purchase price or current value
Letting agent projection
Booking history, if available
Details of personal use
Management plan
Insurance information
Limited company documents, if applicable
Portfolio schedule, if you own other properties
Details of refurbishment works, if relevant

A broker can help you understand what evidence is likely to be needed before an application is submitted.

Location Matters for Holiday Let Mortgages

Location can be a major factor in holiday let mortgage applications. A strong tourist area may support projected income, but lenders will still look at the property, borrower and management plan.

Popular holiday let areas may include:

Cornwall
Devon
Dorset
Norfolk
The Lake District
Wales
Scotland
Coastal towns
Rural holiday destinations
City short-stay locations

Some areas may have local restrictions, licensing rules, planning requirements or second-home controls. Always check local authority requirements before committing to a purchase.

If you want to find support by area, visit our mortgage brokers by location page.

Remortgaging a Holiday Let

You may want to remortgage a holiday let if your current deal is ending, you want to raise funds, or the property has changed use.

A holiday let remortgage may help you:

Replace an existing mortgage
Review your rate before moving to a standard variable rate
Move from personal use to short-term letting, subject to lender approval
Release equity for improvements
Raise funds for another property purchase
Restructure borrowing into a limited company, where suitable
Review borrowing after building a booking history

Lenders will still assess income, property use, occupancy, affordability and wider risk.

For help with refinancing, visit our remortgage mortgage brokers page.

Using Bridging Finance for a Holiday Let Purchase

Some holiday let purchases need short-term finance before a standard mortgage is available. This can happen if the property needs work, is bought at auction, or must complete quickly.

Bridging finance may be considered where:

The purchase is time-sensitive
The property needs refurbishment before it can be let
A mortgage offer is not ready in time
You are waiting for another property sale
You need a short-term route before refinancing
The property is not immediately mortgageable

Bridging finance is not suitable for everyone. It is usually short-term, and the exit strategy must be clear.

For specialist short-term finance support, visit our bridging loan mortgage brokers page.

Holiday Let Insurance and Protection

Holiday let properties can carry different risks from standard homes or long-term rental properties. Guest turnover, vacant periods, public liability and damage risk can all affect cover.

You may need to consider:

Buildings insurance
Contents insurance
Public liability cover
Accidental damage cover
Loss of income cover
Employer liability cover, if staff are used
Mortgage protection
Life insurance
Income protection

For protection support, visit our protection mortgage brokers page.

Is a Holiday Let Mortgage Right for You?

A holiday let mortgage may be suitable if:

The property will be let to short-term guests
You have a suitable deposit
The expected income supports the application
You understand seasonal income risk
You have checked local rules
You have considered tax advice
You have budgeted for running costs
You understand lender restrictions on personal use
You are comfortable managing bookings, guests and maintenance

It may not be suitable if:

The property is mainly for your personal use
You need guaranteed monthly rental income
The property has weak local demand
You have not checked planning or licensing rules
The projected income is too uncertain
You do not have enough deposit
The property needs major work before it can be let
You need a simple residential mortgage

A specialist mortgage adviser can help you compare options before you make a decision.

Speak With a Holiday Let Mortgage Broker

A holiday let mortgage is not just about finding a rate. Lenders may assess property type, projected guest income, location, occupancy, personal use, ownership structure, deposit size and affordability.

Connect Experts helps you find advisers by expertise, location, language and profile. This can make it easier to compare advisers who understand holiday lets, buy-to-let finance, short-term rental income and specialist mortgage criteria.

FAQ: Holiday Let Mortgages in the UK

Question	Answer
What is a holiday let mortgage?	A holiday let mortgage is a mortgage for a property that is rented to guests on a short-term basis. It is different from a residential mortgage and different from a standard buy-to-let mortgage.
Is a holiday let mortgage the same as a buy-to-let mortgage?	No. A buy-to-let mortgage usually involves longer-term tenants and regular monthly rent. A holiday let mortgage is designed for short-term guest stays, seasonal income and holiday accommodation.
Can I use a residential mortgage for a holiday let?	Usually not. Residential mortgages normally do not allow the property to be rented to paying guests. You should speak to your lender or adviser before changing the use of a property.
How much deposit do I need for a holiday let mortgage?	Many lenders ask for around 25% deposit, although this can vary. Some cases may need a larger deposit depending on the property, income, borrower profile and lender criteria.
Can I stay in my holiday let?	Some lenders allow limited personal use, but each lender has its own rules. You should confirm this before applying.
Can I get a holiday let mortgage for Airbnb?	Some lenders may consider Airbnb-style short-term lets. The lender may want evidence of projected income, occupancy, local demand, management arrangements and platform history.
Can I buy a holiday let through a limited company?	Some lenders accept limited company holiday let mortgage applications. You should take tax advice before deciding whether to buy personally or through a company.
Do lenders need letting agent projections?	Many lenders ask for a holiday letting projection, especially if the property has no booking history. Existing booking records may also help.
Are holiday let mortgages regulated?	Some holiday let mortgages may not be regulated in the same way as residential mortgages. This depends on the borrower, property use and lending structure. A qualified adviser can explain how this applies to your case.
Why use Connect Experts?	Connect Experts helps you find mortgage advisers by expertise, location, language and profile. This can help you compare advisers who understand holiday let mortgages and specialist property finance.