Holiday Let Mortgage Boom As Predicted
Published / Last Updated on 08/04/2021
According to Moneyfacts, mortgage options for holiday lets have risen by 45% over the past 6 months, with product availability double that of August 2020, as people turn to UK staycations ahead of a ban on foreign travel.
The comparison website's figures show there are 149 holiday let deals available, compared to August 2020 with only 74 products.
Many smaller players are now offering holiday let mortgages with Mansfield Building Society having launched a 5-year fixed rate holiday let mortgage at up to 65% LTV last month and in March, Ipswich Building Society launched a 2-year fixed rate holiday let mortgage.
Almost 1,700 adults were surveyed by YouGov in January and 29% 1 in 3 planned to travel domestically in the next 6 months, whilst 12% that’s 1 in 10 planned to travel internationally.
Comment
With growing demand building societies are willing to provide deals for either borrowers who use their own home as security or take out new mortgages to fund a holiday let purchase.
The staycation boom has made the holiday let market strong both in coastal and rural areas that attract tourists. We have first hand experience of this given that our head office in Newquay, Cornwall with both demand, interest and prices all surging upwards. Last month, Rightmove suggested that Cornwall was now the most searched for area for property out stripping searches for London properties.
We urge caution though. A holiday let is very different to a buy to let. Not in terms of safety or costs but in the active management for a holiday let as a business rather than a buy to let as a landlord that perhaps has involvment in their property no more than a few times a year. For holiday lets, you may be involved both daily and weekly with turnovers, new guests, cleaning and hygiene amid covid-19.
That said, it is very attractive as an investment where in demand properties and locations can command lettings fees in the £000s per week.
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