What is a holiday-let mortgage?
A holiday let mortgage is a loan applied for the full value of the property that could be rented out while the owner remains living in the property. The term ‘holiday let’ refers to the fact that the overseas property is used as a holiday home rather than being rented out permanently. As per the latest statistics more than 80% of Britishers, planning a staycation in the UK this year which has increased the let mortgage rates.
How do I apply for a holiday-let mortgage?
To get started with a holiday-let mortgage application you will need to contact one of our overseas mortgage brokers who will discuss your needs and provide advice on whether a holiday-let mortgage is suitable for you. You can also ask them to look into the availability of a holiday-let mortgage product for you.
Can I use my existing mortgage to fund a holiday-let mortgage purchase?
Yes, you can use your current mortgage to fund a holiday let purchase. However, you will have to pay a fee when transferring your mortgage to another provider. This is due to the fact that the new mortgage lender will charge you a fee for their services. If you are interested in reading about remortgages, you can read our article.
What’s the difference between buy-to-let and holiday let?
Holiday lets are very popular property investments. You can make a lot of money renting them out. Tax reliefs are available on mortgages when letting a furnished holiday let. Buy-to-let properties are taxed less favourably than holiday lets. Also, the rental income from buy-to-let mortgages is different from holiday homes. Holiday lets are an excellent investment if you want to make additional income off your house while you’re away. You can rent out your house during the summer holidays or winter break. However, this means that you’ll need to spend a lot of time maintaining the property. You also may not be able to sell the property until after the holiday season ends. If you are interested in a holiday-let mortgage application, you can contact a specialist broker who can help you with an excellent mortgage deal.
What sort of mortgage do I need for a holiday let?
If you wish to let your property out for a short period of time, such as a few weeks, then a simple residential mortgage might work well for you. A holiday let mortgage requires a higher level of documentation compared to a standard residential mortgage. For example, you will need to show proof of rental income from the rental property. In addition, it’s important to keep track of all expenses associated with the property. It may be necessary to include these costs in the rental agreement. If you are looking for a holiday let mortgage, you should consider getting professional advice before applying.
What are the tax implications of a holiday let?
Renting out furnished holiday accommodation means you can claim capital gains relief when you sell the asset, but you’re still liable for any losses incurred during the year. You can claim an allowance for furniture, equipment, etc., and if your business makes losses, you can offset them against profits in future years. And profits from the business are counted as earnings for pension purposes.
How much rental income could I gain from a holiday home?
You can expect to earn around £2,000 per month from a two-bedroom holiday home. The amount depends on location, size, furnishings and how long you plan to stay there. If you have a three-bedroom property, you can expect to earn up to £3,500 per month. If you decide to rent out a four-bedroom property, you could earn up to £5,000 per month.
