Holiday let mortgages
If you are looking to stay in the property yourself and use it as a holiday home from time to time, then the criteria for a holiday let mortgages are likely to be a little stricter than if you are just letting it out constantly.
Letting a holiday home for a portion of the year has become a popular way to generate additional income, however in most cases it is not possible to do so with a residential or standard by to let mortgage, you will need a ‘holiday let mortgage’ which are less commonly available among the big lenders than buy to let products.
Buy to let mortgages usually have occupants on an ‘assured shorthold tenancy’ which is not usually suitable for holiday makers.
As the amount of time a holiday home is occupied, is less consistent than with a buy to let and the fact that the rental yield can fluctuate between the high and low season means that lenders see holiday lets as being of higher risk.
Holiday let mortgages
However, Mortgage Solutions have a range of suitable products available from a selection of building societies and smaller specialist lenders.
Desirable tax breaks add to the appeal of holiday-let ownership – at a time when the Government is slashing tax reliefs associated with other property investments, such as buy-to-let.
For example, if the property is fully furnished and run like a holiday rental home, then it can be viewed as a business venture.
So, you could be eligible for receiving tax relief on the mortgage interest payments. And just like any other trading business, any losses incurred can be offset against future profits.
To qualify for most of the tax relief benefits, your holiday property needs to be available to let for less than two-thirds of the year and to have been actually rented for around one-third of the year.
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