We have a couple of questions for you which I hope that you can help us with because we are receiving conflicting advice.
My wife and I are thinking of moving house, but there is a chance that I will be promoted in about a year’s time to a position which will require us to move around the country quite a bit. My company has said they can organise a Corporate Let of our home while we are away, but we are looking at letting on a holiday let basis instead and would like to know:
- If we buy now using a residential mortgage and I get my promotion, can we ask the lender if they would allow us to holiday let the property. What would be the likely outcome?
- If it’s a no, is there anything that we can do to “hedge our bets”, as my promotion is not guaranteed?
Guy, You can certainly ask the lender!! However, the most likely outcome is that they would not consider your request for consent to holiday let. Holiday Let mortgage lending is classed as “business purpose lending”, which is indeed how HMRC views that style of letting. Most lenders in the residential mortgage market give business purpose lending a wide berth because it’s more difficult to understand than the residential lettings market.
Whilst there is 1 residential lender which would allow you to holiday let the property for a short period of each year, it is very likely that the simplest course of action now may be to take out a residential mortgage, which is Early Repayment Charge Free. Once you know about your promotion, you can then remortgage to a Holiday Let lender without penalty.
Speak to us about your situation, the property, the size of loan that you are taking out. We will ask you some questions about the potential for Holiday Letting, in order to explore the possibility of a re-mortgage onto a holiday let mortgage.