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How to get a holiday mortgage in the UK

Nearly one in five has thought about buying a British holiday since the pandemic stopped traveling abroad – and, according to a new study, the idea was most relevant before the age of 35.

About 17 percent have thought about buying a second home in the past two years, with people between the ages of 18 and 34 most often doing so, according to the Suffolk Building Society.

But half said they would consider buying a second home regardless of the pandemic, believing that the current popularity of holiday homes will remain even if travel restrictions are now lifted.

Home from home: 17% of Britons have thought about buying a holiday home for rent in the last two years with popular places including Devon, Cornwall and the Lake District

That’s compared to 32 percent who said they suffered from Kovid.

Devon and Cornwall remain the most popular destinations for potential landlords, followed by Lake District, Peak District and Yorkshire Dales.

Citizens were particularly impressed by the idea: 32 percent of potential landlords were from London. Another 19 percent came from the West Midlands.

The construction company said that both the volume and the total cost of completing new holiday purchases doubled between 2020 and 2021.

Perhaps this was influenced by the holiday stamp duty, which caused a rush of demand throughout the real estate market.

Part of any property acquisition worth less than £ 500,000 – including second homes – was exempt from the standard stamp duty collection between July 2020 and July 2021.

Although buyers still had to pay an additional 3 percent plus a surcharge for second homes, the holiday allowed them to cut the stamp duty bill by about a third in most cases.

By the Sea: A house on the coast has been a priority for 30% of potential landlords

By the Sea: A house on the coast has been a priority for 30% of potential landlords

Suffolk BS found that the property situation was the most important factor for potential buyers, ahead of other considerations such as the potential for renovation.

Just under a third said they would like real estate that is in or near beautiful landscapes, while 30 percent were looking for real estate near the beach or coast.

Only embarrassing quarters wanted real estate in a popular tourist destination, while 28 percent wanted one that did not require special care.

Charlotte Grimshaw, head of the Suffolk Building Society’s mortgage division, said: “The pandemic has helped many of us discover what the UK has to offer, and it certainly also has a positive impact on the environment.

“Instead of automatically heading to a warmer climate, environmentally conscious holidaymakers are realizing that they can enjoy a variety of destinations across the UK while minimizing their carbon footprint while supporting domestic tourism.”

But Grimshaw wanted to emphasize that buying a home was not a decision to be made easily.

She urged potential buyers not to succumb to emotions, and carefully consider the financial aspects of investing in country real estate.

This is especially important for those planning to buy with a mortgage, as getting a vacation loan can be harder than securing real estate to live on.

“Future landlords would be wise not to admire the spirit of the holiday, because the purchase must also be financial – especially for those who need a mortgage on their property for the holiday,” – she said.

“Our advice to anyone considering this path is to make sure you understand the criteria that mortgage lenders will look for, as they can be very different from a standard home mortgage application or even a standard purchase to issue a mortgage.

It takes time to understand the market and familiarize yourself with the competition before falling in love with a property that is unviable in terms of letting

Charlotte Grimshaw, head of the mortgage division of the Suffolk Building Society

“Before jumping on the step, potential owners need to exercise due diligence.

“Consider financial commitments not only for purchases but also for maintenance, taxes and other expenses such as cleaners and gardeners.

“You should also take the time to understand the market and familiarize yourself with the competition before falling in love with a property that is unprofitable in terms of letting.”

For those who are still hoping to find the property of their dreams, the construction company has compiled a list of top tips when looking for a mortgage.

Getting a Mortgage: Ten Tips for Leasing Landlords

Getting a mortgage approved for vacation can be more difficult than for basic housing

Getting a mortgage approved for vacation can be more difficult than for basic housing

1. Keep in mind that many vacation mortgages require the landlord to take out a mortgage, primarily own their main residential property or have already purchased the property for rent – and in some cases a combination of these

2. Understand that some lenders also have age restrictions for first-time landlords, even if they already own a home

3. Estimates of the availability of vacation rentals are usually calculated based on the rental capacity of the property, not personal income and expenses, but the lender still wants to understand the financial situation of the applicant

4. Applicants may need to demonstrate a minimum income set by the lender, but this income can often be from a combination of employment, self-employment, investment, pensions, etc.

Buyers should check to see if the homes in the holiday parks are violating their lender’s terms

Buyers should check to see if the homes in the holiday parks are violating their lender’s terms

5. Be prepared to show third parties proof of rental value in the low, medium and high seasons from a verified rental agent – even if you do not plan to use the agency to manage the property

6. Expect the property to also be appraised by the mortgage lender. Not always accepted real estate in recreation parks, caravans or loggias, as well as objects of unusual construction methods

7. Applicants should not assume that they can sell their property on short-term rental sites such as Airbnb and Vrbo – some mortgage lenders have certain rules that prohibit this

8. Check the amount of personal use allowed so as not to violate the terms. Mortgage companies will always allow the owner a certain amount of personal use, but this may vary

9. Check if the mortgage lender has a limit on the number of rented or purchased real estate that the landlord is allowed to own

10. Special holiday rental insurance must be arranged with liability insurance (usually a minimum of £ 1 million)

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How to get a holiday mortgage in the UK

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