How it differs
Why a normal buy-to-let will not do
Lenders assess holiday lets on projected income across low, mid and high season rather than a single monthly rent, and they usually want that projection from a letting agent rather than from you.
The panel is much smaller, deposits tend to start at 25% to 30%, and many lenders cap how many nights a year you may occupy it yourself.
Worth knowing
Practical points
The income is more variable and the running costs higher than a standard rental, so the yield needs to be looked at carefully.
- Income varies substantially by season and by weather
- Cleaning, laundry and changeover costs between every booking
- Agent or platform commission, which can be significant
- Furnishing to a standard guests expect, and replacing it regularly
- Local authority rules on short-term lets, which are tightening in places
- Tax treatment differs from standard buy-to-let and has been changing
Important
Most buy to let mortgages are not regulated by the Financial Conduct Authority.
Your property may be repossessed if you do not keep up repayments on your mortgage.
Taxation advice is not regulated by the Financial Conduct Authority.