Holiday Let FAQ

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We have tried to give answers to some of the most commonly asked questions concerning holiday let mortgages. If there are any mortgage terms you need help to understand, why not check out our jargon buster.

To buy a holiday home in the UK you will need a minimum deposit of 20-25% of the property value.

This allows a mortgage of 75-80% of the property value.

Some lenders may ask for a higher deposit. The higher deposit reflects the higher risk as it is an investment property.

To make sure your property qualifies as a furnished holiday let (FHL), it must be:

  • in the UK or EEA
  • furnished available for commercial letting to the public, as holiday accommodation, for at least 210 days a year
  • commercially let as holiday accommodation for at least 105 days a year
  • the rent must be charged at market rate and not at cheap rates to friends and family
  • and a short term letting of no more than 31 days.

There are a relatively small number of lenders that provide for holiday lets and some of these also offer buy to let mortgages. However, many holiday let lenders are specialists and work on a commercial finance basis.

To get the best choice you will need to approach a mortgage broker such as ourselves and someone who is familiar with these types of loans.

Mortgages for UK holiday lets are becoming more commonplace and lenders now compete for your business.

You will need a minimum deposit of 25% for a holiday let mortgage, be able to prove your earnings and aged over 18.

Overall, interest rates are a little higher than residential mortgages, this simply reflects the lenders additional risk. However, the potential rental income for a good holiday let more than compensates for the higher rates.

Holiday let mortgages are used to buy a residential property that is then let out to paying guests.

As an investment property the lender is very interested in the income, or potential income, that it can produce. It is this rental income that determines the maximum mortgage amount you can borrow.

In terms of deposit you will need a minimum of 25% of the purchase price/property value.

The borrower needs to have personal earned income of at least £20,000pa.

As with other mortgage types you will be able to choose the mortgage term, interest rate type and method of repayment.

Mortgages for holiday lets are available for purchase or to remortgage.

For more information please read our guide.

This very much depends on the lender and what other investment properties you may own. Please call us to get a correct appraisal for your own circumstances.

Unfortunately not.

The two mortgage types and the property usage that the lender is agreeing to are very different.

Should you use a buy to let mortgage to purchase/refinance a holiday let you will be in breach of the mortgage conditions and the lender could request immediate repayment of the loan. It is also likely that your property insurance will be invalid.

If you currently have a buy to let property and wish to convert it into a holiday then this is possible. We may be able to gain your current lenders consent to this or alternatively remortgage to a holiday let mortgage lender.

The basic mortgage choices are the same; repayment type, fixed/tracker etc.

The main differences are in how the lender calculates the loan size and how they expect the property to be used.

Holiday let mortgage

These allow you to purchase a residential property with the aim of letting it to paying guests on a short term basis. They do not allow anyone to occupy the property and use it as their main residence. The lender looks at the holiday rental income over the low, mid and high seasons to calculate the maximum loan.

Buy to let mortgage

These also allow you to purchase a residential property but letting needs to be via an Assured Shorthold Tenancy (AST) where the tenants stay longer term. It will not allow holiday lets. The loan is determined by the AST income.

Stamp Duty is a government tax that you have to pay if you buy a residential property that costs more than £250,000 in England or Northern Ireland.

Homeowners will pay stamp duty on a tiered basis that is based on the property purchase price.

In addition, residential property investors have to pay an extra charge of 3%.

So if you purchase a buy to let or holiday let property you will pay the standard rate plus the second property levy.


This is possible and many landlords have switched to holiday lets due to the much larger potential rental income.

From a mortgage perspective you have to do one of the following:

Gain permission from your current lender

Your current loan is likely to be on a residential or buy to let basis. We can approach your lender with details of the proposed usage and rental income and request a consent to let. This is their permission to let the property.

Some lenders don’t operate in this market and may just say no. Others may stipulate a fixed period of time only.

The lenders will want to change (increase) the interest rate charged to reflect the change of use and also the increase in risk.

Remortgage to a holiday let lender

This may be a slower option but it will have a more predictable outcome as we will only choose a lender that will want to lend to you! Depending on your current lender this might be the preferred route as the overall outcome will be simpler and possibly cheaper.

The switch will be a normal remortgage so: property valuation, legal involvement etc


Yes. We have helped many expats to buy an investment property (or two) in the UK.

Buy to let tends to be the most obvious choice. But many expats are now recognising the financial benefits of owning a UK holiday home.

Our specialist advisers can find the right expat holiday let mortgage that suits you best.

Using an SPV or Limited Company to purchase holiday lets is now commonplace. There’s a bit more work involved and the setup of the SPV and deposits has to be just right. Our experienced brokers will guide you through the best way to structure your application.

True holiday lets are not regulated by the Financial Conduct Authority (FCA) and they are classed as a business by HMRC.

Most of the holiday let mortgages we arrange are non-regulated as clients buy them as an investment and rent them out as a furnished holiday let (FHL). Equally, buy to lets are not regulated as they are an investment property which is rented out to paying tenants.

Should your circumstances mean that a regulated mortgage is needed then we can of course arrange that for you.

Generally speaking the minimum earned income should be £20,000, not including investment income.

You may find it useful to read about the criteria for holiday let mortgages which will include the borrowers income.

One of the advantages of a furnished holiday let is that you can use it for your own holidays.

However, you cannot live in it permanently.

The property needs to be commercially let as holiday accommodation for at least 105 days a year – the rent must be charged at market rate and not at cheap rates to friends and family.

Whether something is good or better is often down to personal interpretation.

Holiday lets should provide a higher level of rental income and yield than a buy to let. However, this is balanced off by any voids.

If you can choose a holiday let location that gives good demand during all 4 seasons in the UK it should generally perform better than a buy to let.

We have written a brief Guide to Buying a Holiday Home which you may find useful.

To make sure your property qualifies as a furnished holiday letting (FHL), it must be: in the UK or EEA furnished available for commercial letting to the public, as holiday accommodation, for at least 210 days a year (2021/2022) commercially let as holiday accommodation for at least 105 days a year (2021/2022) – the rent must be charged at market rate and not at cheap rates to friends and family, and a short term letting of no more than 31 days.

You can read more about the tax rules here

You do not need to use a letting agent. However, if you live a distance from your holiday let or have limited time then an agent will definitely help.

These are just a few tasks that need to be managed:

  • Marketing to generate enquiries and bookings
  • Someone to deal with the bookings, payments etc
  • Checking in
  • Guest problems or requests during a stay
  • Checking out
  • Cleaning
  • Emergencies – Burst pipes etc
  • Maintenance – Property and outside space/garden

Yes some lenders will accept Airbnb.

Please contact us with any specific requirements prior to making an offer.

New electrical safety regulations for private landlords came into force on 1st June 2020. Privately rented properties must have a valid EICR (Electrical Installation Condition Report) by 1st April 2021.

From 1 April 2021 the Regulations apply in all cases where a private tenant has a right to occupy a property as their only or main residence and pays rent. This includes assured shorthold tenancies and licences to occupy.

As a holiday let is not a main residence, or someones only residence, then it is our current view that these regulations do not specifically include holiday lets.

However, you are required by law to make sure that your electrical installation and all appliances are safe to use.  You may of course voluntarily decide to fully comply with the new regs.

More information can be found on –Guide for landlords: electrical safety standards in the private rented sector

It is not necessary to use a mortgage broker as some lenders do accept holiday let applications direct from new clients.

However, a mortgage broker can help you in so many different ways: