Can we borrow more than £500,000?

Q

I have a question, but it’s probably best that we give you some background in terms of our problem.

We have found a property in Devon that would make an ideal holiday let property. It’s a single dwelling, just a large house with an acre of land; nothing unusual at all. Located in the South Hams, it’s on the market at offers over £1M.

My wife has recently inherited circa £600K. £500K of this can be used towards the purchase of the holiday let. My wife and I thought that, as we are providing such a large deposit and will be borrowing around 50% of the property’s value, obtaining a mortgage would be plain sailing.

We were wrong.

Having made enquiries with a number of lenders we found that seemed to lend on holiday let businesses, it seems that they all set a maximum loan size of £500,000?

Our question is simple, can we obtain a loan of £500K or more on our start-up holiday let business?

Best, Lloyd

A

The answer to your question is yes.

Whilst the majority of lenders in this market set a £500,000 maximum loan for holiday lets, there is a lender which specialises in mortgages for single unit holiday let properties, small holiday let complexes and entire holiday let sites, that will lend more. They have underwriters with years of experience in the tourism sector and will lend up to around £1 million, at 60% LTV on a start-up holiday let, using projected holiday let rental.

If you would like to take your question to the next stage, please call our office and speak to one of our holiday let advisers.