First, it was delays in renewing passports, then staff shortages at airports, flights cancelled and now significant delays at ferry terminals – getting away on an overseas summer break has never been more difficult.
As a result, the popularity of holidaying in the UK remains strong boosting the holiday let market and giving mortgage brokers an added opportunity to make the most of a buoyant holiday let market.
The current status
With multiple headlines describing ‘Holidays from Hell’ seen in mainstream news and even documentary style programming like BBC Panorama’s ‘Airport Chaos – what’s gone wrong’, the ongoing problems associated with overseas travel are plain to see.
In addition, travel related strikes and a new Covid spike are all making the situation even more difficult. As a result Brits wanting a more carefree option continue to holiday on home soil creating demand for short term, holiday let options.
Sarah Cooper, from Hertfordshire, where our Society is head quartered comments: “We’ve decided to holiday in the UK again this year.
I just can’t imagine taking my young family through an air or ferry port right now, it seems such a hassle with all the delays and cancellations involved. Holidays are supposed to be relaxing, as such, we’re going for the more trouble free UK option!”
With no guarantee that foreign travel problems will cease in the short to medium term, holiday lets remain a strong option for investors wanting to benefit from the revival and ongoing popularity of UK based holidays.
Surge in UK Holiday Let mortgage applications
With such demand for what we now term ‘staycation breaks’, investors are seizing the opportunity to acquire holiday let property to rent out providing a stream of financing opportunities for both lenders and brokers.
We have many years of experience to compare and contrast in this specialist area of lending and this is a bumper year for holiday let mortgage applications!
Harpenden’s approach
Harpenden’s specialist holiday let product range is not only price competitive but also has some interesting features.
Additionally, there are no restrictions on location for the property purchase giving wider buying options within England and Wales, whether it be in a coastal, rural or city centre location.
We also recognise that investing in a holiday let is not just about the money. As such we have included an additional feature which allows the owner to enjoy their holiday let property themselves for up to 90 days per year.
Loans of up to £2m are available; Airbnb rentals are accepted; personal income can be used if required to support the loan (top slicing); up to three properties on one title will be considered; as are properties above commercial premises; with 75% LTV available on IO and 80% available on repayment.
In our experience, holiday let purchases are often made by customers with multiple forms of income from a range of financial sources.
Mortgage applications assessed by a mainstream retail lender can’t always accommodate customers with a complex income.
Applications assessed on mass by an algorithm, a popular assessment tool used in isolation by many larger lenders, can be rejected at the first step for those customers with a non-standard financial profile.
At Harpenden we, and some other specialist lenders, manually underwrite every mortgage application helping us to take a considered view; to assess the risk in more detail and to look at the wider picture. We want to say ‘yes’ – with the benefit of manual underwriting, a complex holiday let mortgage application can often proceed.
The holiday let market remains strong with the opportunity to secure favourable rental yields. For those of you with a customer looking to invest in a holiday let property, a specialist lender like ourselves will be delighted to discuss the options with you.
Emily Smith is head of intermediary sales & distribution at Harpenden Building Society
