So you are looking for a holiday let mortgage. But are you sure you know exactly what a holiday let means?
This may seem a silly question. But there�s a lot of confusion between �holiday lets� and �buy-to-lets�, and between �holiday lets� and �holiday homes�. Getting a holiday let mortgage is quite different from getting a mortgage on either a holiday home or a buy-to-let. So what are the differences?
A holiday home is a second home which you buy for your own use or the use of your family and friends, while a holiday let is a property you buy to let out commercially as a business. A holiday let is quite different from a buy-to-let property, which is let out for residential use and is regarded as an investment, not as a business.
So if you are looking for a
holiday let mortgage, how can you be sure your property can be defined as a holiday let?
The Inland Revenue is quite clear as to what makes your property a holiday let. This is a Good Thing, because there are a lot of tax advantages in being treated as a business not an investment.
To count as a holiday let as far as the Inland Revenue is concerned:
� The property must be in the UK.
� It must be available for letting for at least 20 weeks (140 days) in a year. Remember this is the minimum as far as the taxman is concerned. If you use a lettings agency, some demand a much higher availability than this � some as much as 50 weeks in the year!
� It must achieve an actual letting rate of 10 weeks (70 days) in the year. This must be at the commercial rate, not at a reduced or non-profit rate for family and friends.
� It must not be let to one single occupier or group for more than 31 days in a seven-month period, although it can be during the remaining five months of the year.
� The property has to be fully furnished.
If you�re sure your property qualifies, you can then start looking for the right kind of mortgage. A holiday let mortgage is a bit harder to arrange than a standard buy-to-let mortgage and not all lenders want to know. However, there are some who will be happy to consider it. If you talk to a good Independent Financial Adviser or independent mortgage broker, they will point you in the right direction for your holiday let mortgage.
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Sean Horton is a Director of
Holiday Let Mortgages who offer expert advice on holiday let and holiday home mortgages and finance.
