A combination of the pandemic and, subsequently, the cost-of-living crisis have driven more UK residents to seek holiday options closer to home.
And, it would seem, mortgage lenders are responding to this demand.
According to Moneyfacts.co.uk there are now more than 300 deals available to for holiday-let investors, a growth of 72% since September 2021.
With 320 options, choice has nearly doubled since the start of the pandemic in March 2020.
Moneyfacts said there were now 31 different brands, six more than in September 2021 and 11 more than in March 2020, the majority of which are currently building societies.
What holiday home landlords should watch out for
However, whilst it may seem now is great time to invest, there are a few things to consider before entering the Airbnb or holiday letting space.
Not least government rules which are about to be introduced in April 2023 which will require holiday let owners to show evidence of their lettings and meet certain criteria to qualify for business rates relief.
The properties will need to be rented for a minimum of 70 days a year and available to be rented out for 140 days a year.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “It is hoped the changes will protect legitimate holiday let investors and crack down on others but may also deter potential investors who have doubts over meeting the new rules.”
Holiday lets also come with other potential pitfalls, which are not as prevalent in traditional buy-to-lets.
Rachel added: “Borrowers who are tempted to invest must consider the upfront costs to get a property to a high standard so they can stand out from the competition, but also prepare themselves to experience seasonal dips.”
She added: “They will need to do their research to find the right property and location and perhaps use a listing service to get good exposure.”
And, despite the array of mortgage choices, potential holiday home owners should still make sure they select the right deal for them.
“Growing choice is good news for borrowers comparing deals with the most competitive package, and with interest rates rising, it has never been more important to compare the overall cost of a deal carefully and lock into a competitive rate for peace of mind,” Rachel concluded.
