Yesterday Landlord Today reported that there was now a 15 year record high in the number of buy to let mortgage products available for current or new landlords after a rise of 222 products in just one month.
Now it seems the same trend is happening in the sector of mortgage lenders trying to win holiday let landlords.
According to independent mortgage market monitor Moneyfacts there are now more than 230 deals available in this sector, treble that of August 2020 and a rise of 25 per cent since September 2021.
There are now 27 different lenders trying to win holiday let landlord business, two more than in September 2021 and 13 more than in August 2020.
Rachel Springall, finance expert at Moneyfacts, says while the growth is positive news, the fast developing sector may yet attract even more competition which would ultimately be good for landlords.
“As the desire for a UK vacation rose due to the pandemic, the prospect of earning some extra income through a holiday let has spurred borrowers into action and lenders are catering for this demand:” she says.
“Whether such buoyant activity in the holiday let market will remain is unknown but, encouragingly, research from Hodge revealed a 173 per cent rise in mortgage applications for holiday let in 2021 compared to the previous year.
“If the demand for a UK holiday in 2022 lessens, consumers may still get a reasonable return on any investment, but it’s vital for them to ensure they are offering a let during a bustling season so they do not miss out on a demand spike.
“There may also be the need to fund upfront costs to get a property at a high standard to let, to entice a larger clientele and to stand above the competition. Should this be the case, borrowers will need to think carefully about what can make them a unique booking, and this will often depend on their location and the time of year.”
The government has recently announced new measures to ensure homeowners letting out a property are not abusing a tax loophole.
To qualify for business rates, holiday lets will need to be rented for a minimum of 70 days a year and available to be rented out for 140 days a year under new rules which are to come into force from April 2023, and evidence will need to be shown.
The government says the move is a bid to protect genuine holiday lets and crack down on others.
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