Holiday Lets are very similar to a standard buy to let with the key difference being than instead of assured shorthold tenancy agreements (ASTs) being for 6-12 months they are on a much shorter basis such as maybe a weekend or a fortnight.

These take up a small percentage of the market and tend to be mostly provided by smaller building societies, the small amount of numbers is reflected with rates being higher than standard buy to lets.

Lenders will often cap the maximum loan to value (LTV) at 75% with the best rates obtained at the 60% LTV mark.

Rental income must be assessed differently as holiday lets are most often rented in the warmer months so rental income will fluctuate with the seasons, lenders can assess rental income by speaking to a local agent for an opinion or they may take a yearly average and combine the high/medium/low seasons income.

One very large benefit of holiday lets is that they are not effected by the changes in tax relief which began in 2017 which means that unlike standard buy to lets, the mortgage payment of a holiday let may be written off as an expense when it comes to doing your self assessment if it meets certain criteria such as being furnished, up for letting 210 days a year and actually let out for at least 105 of those, but you would need to speak to a qualified accountant regarding this.

Subscribe to our mailing list