Holiday let options rise as more lenders participate

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
06/09/2021

Holiday let options rise as more lenders participate

Borrowers in a position to invest in buy-to-let to take advantage of a rise in staycations will find more choice of holiday let deals and according to the analysis by Moneyfacts.co.uk, more lenders have entered this niche arena over the past few months.

  • Mortgage options for borrowers looking at holiday lets have more than doubled since August 2020, there are now 186 options available compared to 74.
  • More lenders have entered the market, there are now 25 different brands versus 14 in August 2020, the majority of which are currently building societies.
  • The number of holiday let companies set up between January and June this year was an increase of 83% versus the whole of 2020 and 119% more than in 2019 according to Hamptons International.

Holiday let options rise as more lenders participate

Borrowers in a position to invest in buy-to-let to take advantage of a rise in staycations will find more choice of holiday let deals and according to the analysis by Moneyfacts.co.uk, more lenders have entered this niche arena over the past few months.

  • Mortgage options for borrowers looking at holiday lets have more than doubled since August 2020, there are now 186 options available compared to 74.
  • More lenders have entered the market, there are now 25 different brands versus 14 in August 2020, the majority of which are currently building societies.
  • The number of holiday let companies set up between January and June this year was an increase of 83% versus the whole of 2020 and 119% more than in 2019 according to Hamptons International.

Buy-to-let mortgage market analysis

BTL options available
(fixed and variable)

Mar-20

Aug-20

Oct-20

Apr-21

Sep-21

Available to holiday let

162

74

103

149

186

Lenders offering holiday let deals

20

14

17

21

25

Average fixed rate available to holiday let

3.37%

3.53%

3.79%

3.95%

4.14%

Source: Moneyfacts.co.uk

Buy-to-let mortgage market analysis

BTL options available
(fixed and variable)

Mar-20

Aug-20

Oct-20

Apr-21

Sep-21

Available to holiday let

162

74

103

149

186

Lenders offering holiday let deals

20

14

17

21

25

Average fixed rate available to holiday let

3.37%

3.53%

3.79%

3.95%

4.14%

Source: Moneyfacts.co.uk

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“It’s positive to see a rise in holiday let product choice for landlords over the past few months, but the market is still relatively niche as there are less than 200 deals available. As the demand for staycations remains evident, it would not be too surprising to see more growth in this market in the months to come. In August 2020 only 14 lenders were offering a buy-to-let mortgage available to holiday let, whereas today there are 25 and many of these are building societies.

“The mix of uncertainties this year surrounding international travel has caused demand for holiday lets and, according to Hamptons International, there were 1,404 new holiday let incorporations in England, Scotland and Wales between January and the end of June 2021. They recorded this as the highest number since their records began in 2007, an increase of 83% compared with the number of holiday let companies set up in the whole of 2020 and 119% more than in 2019.

“Whether the appetite for staycations falls into 2022 is unknown but for the moment it's evident landlords are taking advantage of the opportunity to earn an income through holiday lets. Those who may have saved some additional disposable income during the UK lockdown, or are looking for alternative investment opportunities, may then be keen to get involved. Undertaking thorough research into popular locations, weighing up tax benefits, reading up on rules regarding residency periods and other potential expenses outside of utility bills can feel daunting, so seeking advice before entering an arrangement is wise.”

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“It’s positive to see a rise in holiday let product choice for landlords over the past few months, but the market is still relatively niche as there are less than 200 deals available. As the demand for staycations remains evident, it would not be too surprising to see more growth in this market in the months to come. In August 2020 only 14 lenders were offering a buy-to-let mortgage available to holiday let, whereas today there are 25 and many of these are building societies.

“The mix of uncertainties this year surrounding international travel has caused demand for holiday lets and, according to Hamptons International, there were 1,404 new holiday let incorporations in England, Scotland and Wales between January and the end of June 2021. They recorded this as the highest number since their records began in 2007, an increase of 83% compared with the number of holiday let companies set up in the whole of 2020 and 119% more than in 2019.

“Whether the appetite for staycations falls into 2022 is unknown but for the moment it's evident landlords are taking advantage of the opportunity to earn an income through holiday lets. Those who may have saved some additional disposable income during the UK lockdown, or are looking for alternative investment opportunities, may then be keen to get involved. Undertaking thorough research into popular locations, weighing up tax benefits, reading up on rules regarding residency periods and other potential expenses outside of utility bills can feel daunting, so seeking advice before entering an arrangement is wise.”

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts.co.uk is a financial product price comparison site, launched in 2000, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, there is no commercial influence on the way Moneyfacts.co.uk ranks products, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfacts.co.uk if you decide to source this information.

For more information about us please see our key facts.

 

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts.co.uk is a financial product price comparison site, launched in 2000, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, there is no commercial influence on the way Moneyfacts.co.uk ranks products, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfacts.co.uk if you decide to source this information.

For more information about us please see our key facts.

 

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Rachel Springall Press Officer / Finance Expert
Eleanor Williams Press Officer / Finance Expert