There have been a lot of regulatory changes in the buy-to-let (BTL) mortgage market over the last few years. This has forced some landlords and property investors to seek out ways to diversify portfolios and increase yields.

Profit margins for many have been hit by the removal of mortgage interest tax relief, Energy Performance Certificate (EPC) requirements and higher interest rates. This is particularly true for small-scale property investors and individual landlords who only have one or two properties.

On the back of these changes, some investors have shifted towards holiday lets to seek out potentially higher yields in the short-term rental sector.

This area of the mortgage market has grown in recent years. Several new entrants has increased competition and the number of mortgage deals available.

The domestic holiday let market has been in high demand since the Covid pandemic. More people have realised the ease and flexibility of opting for a staycation at home rather than travelling abroad.

While the holiday let sector is also set to experience some changes, it remains an
attractive proposition for many investors, especially in tourist hotspots.

Online platforms like Airbnb have made it easier for investors to access this market. They offer an efficient way to promote and manage short-term properties. They can also be useful tools for landlords to block off personal visits to the property. Some holiday let mortgages will allow limited personal use.

Those looking to purchase or invest in a holiday let property should connect with a mortgage broker who understands this niche area of the market. Holiday let mortgages are specifically designed to address the finer details of owning a holiday home.

Lending criteria for holiday let mortgages can vary widely across the market. But when calculating risk and affordability, holiday let mortgage lenders typically factor in the projected rental income and the investor's overall financial profile.

Get in touch with our friendly and knowledgeable team for more information.

Some forms of Buy to Let mortgages are not regulated by the Financial Conduct Authority.