Mansfield Building Society has added a holiday buy-to-let offer to its mortgage range.
Allowing loans up to 70 per cent loan-to-value (LTV), Mansfield will allow holiday let landlords to personally occupy the property for up to 60 days a year.
The building society will also consider earned income and other personal wealth to support rental income in affordability assessment.
Richard Crisp, commercial development executive at Mansfield, said the addition was part of a commitment to support a “healthy and diverse” rental sector and one hoped to be well received by both brokers and landlords.
He said: "Feedback from brokers suggested that we needed to make our products accessible and flexible, so we are pleased to confirm that our holiday let product includes top slicing and capital raising, enabling more investors to unlock more value from their investment portfolios."
The offer is available for purchase or remortgage at a three year discounted variable rate and 3.49 per cent pay rate (2.10 per cent below SVR) with a £199 application fee and £1,800 completion fee.
Under HM Revenue & Customs guidelines, holiday lets must have a minimum valuation of £150,000 and qualify the furnished holiday let definition.
Mr Crisp said he sees a strong future for holiday lets in the UK with the implications of Brexit likely to reduce appetite for overseas investment.
He said: "However, Brexit fallout aside, let’s not forget the favourable tax treatment furnished holiday lets continue to receive compared to other forms of residential property letting under HM Revenue & Customs rules.
"We believe holiday lets provide a credible opportunity for landlords to extend and strengthen their investment portfolios but appropriate advice should be considered a prerequisite."
Bed and breakfast accommodation, AirBnBs and holiday complexes are not accepted on Mansfield’s product.
David Hollingworth, associate director of communications at London & Country Mortgages, said the number of lenders that can consider holiday lets is still relatively limited although options have been on the increase.
He said: "Lenders are often put off by the seasonality of rental income and the higher potential for tenancy voids but some lenders like Mansfield are prepared to look at the likely overall picture to assess the likely income and can also include spare disposable earned income. Allowing for personal use is another practical and common sense approach.
"Competition is likely to come from others in the building society sector with lenders such as Leeds Building Society and Principality Building Society among others offering holiday let options."
rachel.addison@ft.com
