Holiday Let Mortgages

planetbrain

I'm looking to buy a studio appartment in central london.

The studio will cost around 200K and I'll put down around 50K. It'll bring in around 1200 pounds per month year round.

I don't seem to be able to find any holiday let mortgage providers. Any one in the same boat who can suggest someone currently providing?

Have just been told by one estate agent mortgage broker that as it will be rented out year round then a standard buy-to-let is possible?

Cheers

planetbrain

I'm not even sure what we want is classed as a holiday let.

We never want to live in the property just rent it out year round so maybe this just makes it a buy-to-let mortgage that we are after without any agreed short hold tennency agreements.

Any experts out there that can tell me what I should be looking for?

We don't currently own a property (we rent and plan to continue). I have owned a property before (sold Oct 07).

Thanks

PB.

blueberrypie

planetbrain wrote: »

I'm not even sure what we want is classed as a holiday let.

We never want to live in the property just rent it out year round so maybe this just makes it a buy-to-let mortgage that we are after without any agreed short hold tennency agreements.

The tax rules and requirements are different for holiday lets and standard rental letting, as are lenders' requirements. There's some information at holidayletmortgages.co.uk - I have never had a holiday let property, but I've dealt with the same company for other reasons and they've been helpful.

Conrad

A B2L mortgage is the only option, but these are now strictly underwritten to include the following;

+ Minimum AST of 6 months must usualy be evidenced (you can buy them in Smiths I think)

+ Minimum earned income levels need to be evidenced in most instances

+ New build properties are treated cautiously. The sorts of factors the lender might consider include thier group exposure (for example, if you want a C & G loan, what is the exposure to the Lloyds Banking Group on that development)

+ Rental yield compared to mortgage payment at the lenders notional assumed level (typicaly assumed to be a mortgage at say 6.5% for example)

+ Developer inducements (in case this is new build) will be edited out of the equation and then the price paid will be assessed as if these inducements were not present, afterall no such inducments will be on the table if the lender has to repossess and resell

+ Studios are excluded by some lenders

+ High rise is pretty much a no go for most lenders
Best of luck

planetbrain

Thanks for replying

The problem is there won't be an AST of 6 months minimum

We want bookings from people for as little as 2 days

Are we doomed?

Conrad

An AST for 6 months with 'a' tenants signature will normally be requested.

The only way you would obtain finance on the property with no AST would be by way of expensive commercial funding limited to about 60% ltv with rates from 10%+