Beverley attracts many visitors each year, making it a great location for a holiday let investment. If you’re thinking about buying a property to rent out on a short-term basis, understanding how buy to let mortgages in Beverley work for holiday lets is essential.
What is a holiday let mortgage?
A holiday let mortgage allows you to purchase a property that you can rent out to different guests throughout the year.
Unlike a standard buy to let mortgage in Beverley, which applies to long-term rentals, this type of mortgage is designed for short-term stays. Lenders assess applications based on projected seasonal income and occupancy rates, rather than a fixed monthly rent.
Am I eligible for a holiday let mortgage?
Lenders consider several factors when assessing eligibility. They will check your credit history, financial background, and income to ensure you can manage repayments. The property itself also needs to meet specific requirements, including its ability to generate enough rental income throughout the year.
Many lenders ask for a larger deposit than standard buy to let mortgages. While some accept as little as 25%, others may require 30% or more. They also assess affordability by looking at both your expected rental income and your personal financial situation.
Are holiday let mortgages worth it?
A holiday let can generate strong returns, especially in a sought-after location like Beverley. Short-term lets often produce higher rental yields than traditional long-term tenancies, as you can adjust pricing based on demand.
Tax benefits also make holiday lets attractive. Furnished holiday lets can qualify for mortgage interest relief and capital allowances on furnishings, which aren’t available for standard buy to let properties.
That said, managing a holiday let requires more involvement, including marketing the property, handling guest bookings, and maintaining the home.
How do holiday let mortgages differ from conventional buy to let mortgages?
While both mortgage types allow you to earn rental income, they have key differences. A standard buy to let mortgage in Beverley requires a tenancy agreement of six months or longer, ensuring a steady rental income. In contrast, a holiday let mortgage is assessed based on seasonal earnings, which can fluctuate throughout the year.
Lenders also view the risks differently. A conventional buy to let mortgage prioritises long-term rental stability, whereas a holiday let mortgage must account for periods of vacancy. As a result, lenders often require a higher deposit and may charge higher interest rates.
If you’re considering a holiday let in Beverley, finding the right mortgage is key. Our mortgage advisors in Beverley can guide you through the options and help you secure the best deal for your investment.
Date Last Edited: February 11, 2025
