Landlords seeking mortgages to benefit from holiday market rental yields


The explosion of Airbnb and similar sites enabling landlords to diversify how they make income from their investment properties is forcing change within the buy-to-let mortgage market.

A landlord seeking to maximise their financial returns by switching their income model from traditional assured short-hold tenancy (AST) agreement to holiday rentals will inevitably be required to remortgage by their lender before they can change the ‘use’ of their rental property.

According to research by BDRC, 9% of landlords with more than 20 properties own UK holiday lets, and holiday lets were the second most popular property type to own alongside residential portfolios.

Holiday let mortgage options have been limited

To date, options for landlords have been limited with only eight properly active mortgage lenders in the market (according to Mortgages for Business). Building societies Bath, Principality, Leeds, Furness, Monmouthshire, Mansfield and The Melton are among the few offering specialised holiday let mortgages. Most high street banks and building societies will not offer mortgages for holiday lets, because a fluctuating income reliant on bookings is considered high risk.

Changing your property’s use without your lender’s consent is precarious. If a holidaymaker can find you advertising online (which you need them to do), so can your lender. Lenders do check online holiday property listings, especially if your property is in a popular tourist area. Mortgages for holiday lets will have different rates and terms from a standard buy-to-let, and not informing your lender is fraudulent and could result in serious consequences.

New lender paves the way

This week, Precise Mortgages has announced that it is launching into the holiday buy-to-let market. Alan Cleary, managing director, said: “The UK is proving increasingly popular among both British and overseas tourists which is generating attractive rental returns for holiday lets. The new criteria across the buy-to-let mortgage and bridging finance ranges will help more customers secure the product they need.”

Precise will consider UK applications on houses and flats currently being used as holiday lets. Both individual and limited company landlords will be able to borrow up to £500,000 with a maximum 70% loan-to-value, with rates starting at 2.77%.

With the implications of Brexit and the boom in home-based tourism, UK holiday lets are an increasingly attractive proposition. Landlords seeking to explore the opportunities in this sector may finally be given a broader choice of lender and mortgage products.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800


Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator


Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.


Not a member? Sign up for free

Landlords seeking mortgages to benefit from holiday market rental yields

Landlords seeking mortgages to benefit from holiday market rental yields


By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.