Residential property/holiday let

Spyral14

I am just in the process of buying a small weekend/holiday cottage. My husband’s job comes with accommodation provided (where we live most of the time) so the cottage will be my only owned property. 

The seller has used it as a holiday let when not there and has offered to transfer the existing letting bookings in July and August over to me when I complete the purchase. It would be some helpful income and seems a shame to miss out on that, however I’m conscious of the potential tax and mortgage implications.

The house is being purchased on a residential mortgage through Natwest. I believe it is current business rated and classed as a furnished holiday let.

I have read up on this and it seems to be very complicated. If someone can outline the most sensible options it would be immensely helpful!

pinkshoes

Spyral14 said:

I am just in the process of buying a small weekend/holiday cottage. My husband’s job comes with accommodation provided (where we live most of the time) so the cottage will be my only owned property. 

The seller has used it as a holiday let when not there and has offered to transfer the existing letting bookings in July and August over to me when I complete the purchase. It would be some helpful income and seems a shame to miss out on that, however I’m conscious of the potential tax and mortgage implications.

The house is being purchased on a residential mortgage through Natwest. I believe it is current business rated and classed as a furnished holiday let.

I have read up on this and it seems to be very complicated. If someone can outline the most sensible options it would be immensely helpful!

A residential mortgage can only be used for a property that you will be living in.

If you intend to have holiday letting you will need to speak to your lender and change your mortgage to a business one.

Also, as its not your main property (doesn't matter that the other one is free with work) then you will probably have to pay double council tax.

It might be wise to do some more research before purchasing.

Spyral14

Thank you, my understanding is that NatWest allows up to 90 days of renting out without needing consent to let. 

The council have confirmed the exemption applies so I am ok on that front.

user1977

Spyral14 said:

Thank you, my understanding is that NatWest allows up to 90 days of renting out without needing consent to let. 

If it’s your main residential property, yes. But it doesn’t sound like that’s what you’ll be using it for?

pinkshoes

Spyral14 said:

Thank you, my understanding is that NatWest allows up to 90 days of renting out without needing consent to let. 

The council have confirmed the exemption applies so I am ok on that front.

That's good. I'd just double check the T&Cs of the mortgage to make sure that's OK with it not being your main residence and get this in writing.

Don't forget to check with the current owner about the T&Cs of the holiday bookings and get the deposit transferred over to you for each booking.

I thought the consent to let thing that Natwest do is for people that have already lived in the property and had the mortgage for 6 months?

Bookworm225

you might want to do a little more research since you seem under the impression nat west will give you consent to let from the outset?

Consent to Let | Mortgages | NatWest

SDLT_Geek

Spyral14 said:

I am just in the process of buying a small weekend/holiday cottage. My husband’s job comes with accommodation provided (where we live most of the time) so the cottage will be my only owned property. 

The seller has used it as a holiday let when not there and has offered to transfer the existing letting bookings in July and August over to me when I complete the purchase. It would be some helpful income and seems a shame to miss out on that, however I’m conscious of the potential tax and mortgage implications.

The house is being purchased on a residential mortgage through Natwest. I believe it is current business rated and classed as a furnished holiday let.

I have read up on this and it seems to be very complicated. If someone can outline the most sensible options it would be immensely helpful!

You do not say whether your husband owns another property, or has a share in one. If he did then, assuming the property you are buying is in England, you would need to budget for the extra 5% stamp duty land tax.