A furnished holiday let can be a rewarding investment, but you cannot usually buy one with an ordinary residential or buy-to-let mortgage. Holiday lets have their own type of finance, with their own rules, and getting the right product from the start matters.

Why a holiday let is different

A standard buy-to-let assumes a single tenant on a long assured shorthold tenancy — predictable, steady income. A furnished holiday let works nothing like that: it is let short-term to a stream of different guests, income is seasonal, and occupancy varies through the year. Lenders see that as a different risk, so they assess it differently and offer specific holiday let mortgage products for it.

What lenders look at

Because the income is variable, lenders focus on the property’s projected letting income — often taking a view across low, mid and high season rather than a single figure. Many will want to see a realistic income projection, sometimes from a holiday letting agent. They will also consider the location and the property’s suitability as a holiday let, since a hard-to-let property is a harder risk.

Deposit requirements are typically higher than for a residential mortgage, and the choice of lenders is narrower — this is a specialist corner of the market rather than the mainstream.

The tax angle

Furnished holiday lets have historically enjoyed a particular tax treatment that differed from standard buy-to-let, though the rules in this area have been changing. Tax is not something we advise on — you should speak to an accountant or tax adviser about your specific position — but it is worth being aware that the tax picture for holiday lets is its own subject and can affect whether the investment stacks up for you.

Getting the right finance

Because holiday let mortgages come from a smaller pool of specialist lenders, each with their own criteria on income, location and deposit, this is an area where knowing the market really counts. The right lender for one property and borrower is the wrong one for another.

We arrange holiday let mortgages across the whole market, matching your property and circumstances to the lenders most likely to say yes on good terms. If you are looking to finance a furnished holiday let, get in touch and we will find the options that fit.