In terms of the finance, UK residential property which is let out falls into 2 main camps:
- Buy to let property
- Holiday let property
Buy to let property
A buy to let property investment is let to tenants using an Assured Shorthold Tenancy (AST) agreement. Typically this lasts for six months but can be extended if the tenant and landlord agrees. As the tenant is permanently occupying the property then a buy to let mortgage would be most suitable. The buy to let mortgage lender will assess the property value and AST rent before determining the maximum buy to let mortgage it would lend.
Holiday let property
A holiday buy to let is a property purchased with the express purpose of letting it to paying holidaymakers. With holiday lettings there are no AST’s to be drawn up as none of the guests are permanently occupying the holiday property. However, it would be wise to use a holiday lettings agreement with all guests.
As there is no AST for a holiday let, buy to let mortgage lenders will not lend. They want the property permanently occupied under the protection of an AST. However, there are a small number of mortgage lenders who will offer holiday let mortgages or holiday buy to let mortgages.
A holiday buy to let mortgage is specifically designed for the purchase or remortgage of a UK property which will be let to paying guests. The mortgage lender will assess the property value and the potential holiday let rental income before determining the maximum holiday let mortgage it would offer. Should there be a shortfall between this calculation and the actual mortgage required, some lenders will look to the applicants personal income for a ‘top up’ so that the full mortgage can be granted.
This is a highly specialised area of the mortgage market with only a few lenders taking participation. Holiday Let Mortgages are part of the Enhanced Wealth group and offer expert advice on all aspects of holiday buy to let mortgages and holiday home mortgages for properties in the UK. Finance is available for purchase, remortgage or for property development.
Please visit www.holidayletmortgages.co.uk for more details or call us on 0800 840 3111.