Letting out an entire home as a holiday let is now considered to be a very mainstream idea, and the market is growing rapidly. Unfortunately though, when it comes to offering mortgages, our high street banks have not yet embraced the holiday let market.
In today’s market, you cannot take out a residential or a buy to let mortgage against your holiday let. This would breach the terms of your mortgage contract, which could result in the mortgage having to be repaid immediately.
To get a holiday let mortgage, you need to go on a bit of a hunt and find the specialist lenders who have a good understanding of the holiday let market, and have created products that allow entrepreneurial owners to acquire and run holiday lets.
This area of the market is currently serviced by approximately 20 lenders, most of whom are building societies, who have the experience and skills to assess and underwrite holiday let mortgages. Finding them all can be tricky though, as many don’t even advertise their products and services!
This is why specialists like HCM exist, as we constantly track and monitor over 80 holiday let mortgage products, helping you to source the best possible solution for your individual circumstances.
So who are these holiday let mortgage lenders?
You may have heard of some of the lenders, for example, Leeds Building Society, who are one of the most established holiday let lenders in the market, or Principality Building Society, another well-respected mortgage provider, both of whom have a good range of competitively priced holiday let mortgage products.
These lenders typically provide mortgages to borrowers who are in ‘normal’ situations, which broadly means UK residents with no adverse credit history, who own their own home (or at least did in the last 12 months), and have a strong track record of personal income. Many borrowers have more complex situations though, so what options exist for them?
This is where potentially less well-known names, such as Bath Building Society, Metro Bank (for short-term lets of up to 90 days maximum) or The Melton Building Society, regularly provide good mortgage solutions. These lenders have a more flexible, bespoke approach to underwriting, and are often willing to consider a wide range of potential options, to get you the best holiday let mortgage.
Should I go direct to a lender?
In most cases customers can approach a holiday let mortgage lender directly, although whether or not that is the best way forward is debatable. Let us explain why…
In our experience, sourcing a holiday let mortgage often involves a few ‘bumps in the road’, as people’s individual circumstances are often very unique. Where a customer goes direct to an individual lender, they risk hitting a snag, something they didn’t think would cause a problem, only to find out that the lender cannot continue with their application. As a result, they end up going right back to square one.
At HCM, we understand the complexity that exists in the market, and we maintain close professional working relationships with key lenders, as well as keeping up-to-date with their changing criteria. Consequently, once you have submitted your information to HCM, we will be ideally placed to source the best holiday let mortgage for you, as well as being able to change lenders rapidly, if required, with little extra work on your part.
To find out how we can help you, just contact us.