Holiday let mortgage options have grown by almost half in the past six months, as people turn to ‘staycations’ amid a ban on foreign travel.
Mortgage options for borrowers considering holiday lets have risen by 45 per cent over the past six months, according to Moneyfacts, with product availability double that of August 2020.
Figures from the comparison site showed there were 149 holiday let deals available, compared to 74 products in August.
Holiday let options available: fixed and variable rates
|Available to holiday let||162||74||103||149|
|Lenders offering holiday let deals||20||14||17||21|
Rachel Springall, finance expert at Moneyfacts, said building societies appeared to be “more inclined to provide deals to meet growing demand”, either for borrowers who use their own home or take out a new loan to fund a holiday let investment.
Indeed, last month Mansfield Building Society launched a five-year fixed rate holiday let mortgage at up to 65 per cent LTV.
Ipswich Building Society also launched a two-year fixed rate holiday let deal at 80 per cent LTV in March to meet “recent demand in the short-term lettings market”.
A January survey of almost 1,700 adults by YouGov found three in 10 (29 per cent) planned to travel domestically in the next six months, while one in 10 (12 per cent) planned to travel internationally.
Neil Smith, head of surveyors at Paragon, said: “The holiday let market is strong due to the expected 'staycation' boom and risks in booking flights abroad following news of rising cases of Covid-19 across Europe.
“As you would expect, this is concentrated in areas which attract tourists, with coastal and rural areas proving popular.”
Chris Sykes, associate director and mortgage consultant at Private Finance, said the firm had seen more holiday let enquiries.
Sykes said: “Some of these are from individuals looking to take advantage of what is expected to be a rather busy summer of holidays in England rather than abroad, with a view moving forward that a UK holiday, rather than an international holiday, may be more and more popular.
“Some of these are the wealthy looking for a second home but seeing what options they have to let it for periods of the year when they are not there.
“Others are existing portfolio landlords wanting to diversify out of buy to let property with the hopes of greater yields/profits where their buy to lets have become less attractive over the last few years with the tax changes.”
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