Those looking to buy a holiday that need finance should look for a specialist holiday let mortgage or a form of
bridging finance. Borrowers can use a holiday let mortgage, much the same as a
buy-to-let mortgage and will usually need a minimum 20% deposit and meet the lender’s requirements on rental returns. Borrowers should consider smaller lenders, such as building societies and non-traditional lenders for a holiday let mortgage.
Those wanting to buy a holiday let quickly from an auction or a property that needs redevelopment may need to opt for a bridging loan instead. These usually come with higher interest rates than a holiday let mortgage and higher fees, but completion times can be weeks and not months. In addition, bridging lenders will also consider properties often not acceptable to other lenders under a mortgage.
An example of using a
bridging loan to refurbish a holiday let is from Matthew Rees. Mr Rees is a property developer of some experience and wanted to buy a £1.65 million home in St Mawes in Cornwall and refurbish this as a high end, exclusive holiday let. Mr Rees used Together a specialist lender.
Mr Rees, said: “It has incredible views across the bay at St Mawes and it’s unsurprising it inspired so many fantastic artworks. The holiday let is one of the few properties in the area that has its own private quay leading directly into the bay and, following some minor refurbishments and improvements, I’m ready to welcome families and guests to enjoy the fabulous property this summer.”
Chris Baguley, commercial Managing Director at Together, said: “Even before the pandemic, we were seeing dramatic changes across the buy-to-let landscape with holiday lets steadily increasing in appeal – more so than for traditional buy-to-let properties – as they allow people to tap into the UK’s many tourism opportunities.”
