Demand for rental home mortgages sees boom

Wednesday 08th September 2021 06:34 EDT
 
 

A rise in domestic holidays has prompted a surge in demand for mortgages for UK holiday rental homes. According to financial data provider Moneyfacts, the number of “holiday let” mortgage deals on the market has more than doubled in a year.

The findings coincided with an analysis of government figures by the real estate adviser firm Altus Group that showed more than 11,000 second home owners in England had “flipped” their properties to become holiday rentals since the start of the pandemic. Holiday let mortgages, as they are called, are a type of buy-to-let home loan, and those taking them out include landlords who previously let their properties to traditional tenants, and investors buying a holiday home that they can rent out when they are not there. The routine has created what some have described as a coastal housing crisis, and there is speculation that the government is planning a range of changes to clamp down on second homes.

Moneyfacts said there were 186 holiday let mortgage deals available this month, compared with 74 in August 2020. Meanwhile, many more lenders have entered the market, with 25 now vying for business, up from 14 in August last year. Spokeswoman for Moneyfacts, Rachel Springall said, “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.”

The trend seems to be driven by several buy-to-let landlords looking to diversify in response to regulatory and tax changes.


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