What are Holiday Lets
Holiday Lets are mortgages on a property where it is going to be let out on a very short term basis. It could be from a few days to a few weeks. Holiday lets can usually gain a higher level of income than a BTL if its in the right location. This could be by the seaside, near a historic location or in a major city centre.
How are these assessed
A letter from a local letting agent would need to be provided with the low, medium and high rental estimate’s and when the valuer goes out they would also carry out the research and if it all stacks up they would base it on the middle figure in most cases and use there stress test to check the affordability.
Benefits of Holiday Lets
The income you can receive from holiday lets can be far greater than your standard BTL. There is also an allocated amount of days this can usually be used for personal use where as on a standard BTL this would be breaching terms of your mortgage. You can obtain regular access to the property as the tenants are very short term and if any renovations needed to be made you could have access to the property.
Cons of having a Holiday Let
If the location is by the seaside there may be more demand during summer however you may struggle to tenant during winter where as BTL you would have a tenant with a 12 month tenancy in most cases.
Your home may be repossessed if you do not keep up repayments on your mortgage. Not all Buy to Let Mortgages are regulated by the Financial Conduct Authority.