Buy to let vs Holiday Home

[zoco]

Been thinking about a buy to let.

Would be nice to have a place by the coast to take me missus and me nipper once in a while.

Holiday home seems a good option for this - go down there on weekends when no guests are in.

Got one in mind not far from the Cobb in Lyme Regis. So close to the seafront that you can hear the change jingling in the fruitees

So the question is, is getting a mortgage for a holiday home pretty much like getting a BTL mortgage?

Do you have to demonstrate that the property can earn a certain yield? I guess this is quite difficult at first as you build up business (unless you buy an established holiday let)

[Power Mortgages Ltd]

Hi Zoco,

Holiday lets are not classed in the same way as a buy to let due to the fact that they are not on an Assured Shorthold Tenancy agreement.

The choice of lenders who will accept mortgage applications for a holiday let property are somewhat restricted but there are still a few. Generally you will need a 30% deposit of the purchase price and will need to get an indication from a holiday letting agent of what the annual rental income would be for the property. It is then expected that the rental income would need to be 130% of the interest only mortgage payment on a set rate (I'd use a rate of 5.99% to be safe). If it does not meet this criteria then your own personal income would need to be sufficient to cover not only any mortgage you have personally at the moment but also this mortgage too.

Hope that helps?

[zoco]

Hi Zoco,

Holiday lets are not classed in the same way as a buy to let due to the fact that they are not on an Assured Shorthold Tenancy agreement.

The choice of lenders who will accept mortgage applications for a holiday let property are somewhat restricted but there are still a few. Generally you will need a 30% deposit of the purchase price and will need to get an indication from a holiday letting agent of what the annual rental income would be for the property. It is then expected that the rental income would need to be 130% of the interest only mortgage payment on a set rate (I'd use a rate of 5.99% to be safe). If it does not meet this criteria then your own personal income would need to be sufficient to cover not only any mortgage you have personally at the moment but also this mortgage too.

Hope that helps?

Thankyou, it most certainly does.

You see, I could have spent ages googling that and not acquired even half that information, especially not in a nice concise answer like that.