If you are planning to purchase a holiday let, the first step will most likely be finding the right holiday let mortgage provider. Unfortunately, this task is not as simple as you might imagine, as there are far fewer mortgage lenders within the holiday let market, each with their own strict criteria. Worse still, many of the key lenders don’t actively market their products!
As holiday let mortgages are a specialist area of finance, they are not offered by the majority of high street banks. Instead, this area is dominated by building societies, who have the expertise to assess and manually underwrite holiday let mortgages.
When you start searching for holiday let mortgage providers online, using Google or Bing, you might see various suggestions appear, a bit like this:
- HSBC mortgage calculator
- Barclays mortgage calculator
- Leeds Building Society mortgages
- HSBC buy to let
- Barclays buy to let mortgages
- Yorkshire Bank mortgage calculator
- Santander buy to let mortgage
- Cumberland mortgages
- Bath Building Society mortgage
- Nationwide holiday let mortgage
- Leeds Building Society holiday let mortgage
Unfortunately, this is not very helpful, given that only three of the lenders from this list actually offer holiday let mortgages! No wonder people find the process frustrating.
The main lenders within the holiday let market include:
- The Cumberland: a brilliant and flexible all-rounder, particularly good at handling difficult cases.
- Leeds Building Society: some of the best rates on the market, but they assess holiday lets as if they are long term lets, which can throw up some strange results!
- Furness Building Society: more comfortable with smaller loans, this lender is great at taking a holistic view of each opportunity and assesses on affordability.
- Bath Building Society: if you don’t mind paying higher rates, this lender is ideal for complex cases.
- Principality Building Society: a very important lender with some of the best market rates, but you must meet very specific criteria.
- Monmouthshire Building Society: similar to the above, a great lender but they have structured lending criteria that you must meet.
- Mansfield Building Society: a lesser known lender with a flexible approach to underwriting.
- Scottish Building Society: ideal for holiday lets in Scotland, but not the only one.
- Ipswich Building Society: amazing 80% LTV products, but only available for holiday lets within a certain postcode catchment area.
- Teachers Building Society: this lender really sells themselves on being able to handle almost anything – complex income situations and complex properties.
- The Tipton and Coseley Building Society: more for a second home than a holiday let, this lender needs to know that you plan on using the holiday home mostly as your personal hideaway.
- Metro Bank: this lender can only support holiday lets for a maximum of 90 days per annum.
- The Melton Building Society: another helpful society, but with quite rigid lending criteria.
Based on our research, there are at least a further 10 additional lenders that simply don’t show up in an online search, all offering additional holiday let mortgages.
Questions to consider when searching for a Mortgage Provider
When it comes to finding a suitable mortgage provider, you will inevitably have to ask a number of questions about how they lend and how they assess an application. If you don’t do your research on the provider and their lending criteria before you begin your application, there’s a risk that you’ll encounter problems later on during the process – and that can spell disaster if a delay causes you to lose your property opportunity.
You should consider typical issues such as:
- Does the provider actually lend on holiday lets? It’s worth clarifying before getting too far! Remember that a holiday let mortgage is different to a buy to let mortgage or a second home mortgage.
- Will they accept your income situation? This is particularly important for those who have recently changed jobs or are self-employed.
- Do they lend to properties like the one you are hoping to purchase?
- Does the property have to be a holiday let already? This might surprise some, but certain lenders will only lend to existing holiday lets.
- Are there any specific lending criteria that you should know about? For example, do you own your own home?
- Are you looking at the best mortgage rates possible? This is a key point – how comfortable are you that you have actually found the best deal?
How can Holiday Cottage Mortgages help?
As we have discussed in this article, finding a holiday home mortgage provider can be a difficult task, not only because there are few lenders in the market, but because many of them don’t actively promote their products and services. Not to mention that lending criteria varies hugely from provider to provider.
This is where HCM comes in! With our expert understanding of the holiday let market, we have the ability to arrange holiday cottage mortgages on your behalf. Here’s how we can help you…
- We know all of the holiday let mortgage lenders and have developed great working relationships with their teams on the ground.
- We can find you the best market rate, even when they are constantly changing.
- There are always bumps in the road, but we will fight your corner to get your mortgage over the line and use our relationships within the industry to get you the best result.
- We have an unparalleled combination of holiday letting knowledge and experience, together with mortgage sourcing and arrangement.
If you are looking at buying or re-mortgaging a holiday let, then get in touch with us to find out how we can help you, and how much you can borrow. Contact us, or create an account and request your free, initial assessment (the form only takes five minutes, we promise!).