Buy-to-let landlords will find the choice of holiday let deals is on the rise. According to analysis by Moneyfactscompare.co.uk, the rise in choice is promising, but other challenges lay ahead.
- Mortgage options for borrowers looking at holiday lets have increased to 445 options, up from 362 seen in August 2023.
- There are currently 34 different lenders within this market, two more than in August 2023, the majority of which are building societies.
- Challenges lay ahead for those with a holiday let property; it is expected that from April 2025, the tax advantages for furnished holiday lettings will be abolished.
| Buy-to-let mortgage market analysis | |||||
| BTL options available (fixed and variable) | Aug-22 | Jan-23 | Aug-23 | Jan-24 | Aug-24 |
| Available to holiday let | 354 | 373 | 362 | 415 | 445 |
| Lenders offering holiday let deals | 32 | 33 | 32 | 33 | 34 |
| Average fixed rate available to holiday let | 4.65% | 6.33% | 7.16% | 6.54% | 6.20% |
| Data shown is collected at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk | |||||
“The buy-to-let market has undergone its fair share of upheaval over the past few years, with rising interest rates and tax perks quashed. However, a small part of this market has flourished over the past couple of years, with the availability of holiday let deals rising. There has also been an encouraging increase in the number of lenders prepared to cater to these types of landlords. There are over 400 deals for consumers to choose from and the majority of lenders that currently operate within this space are building societies.
“Holiday let owners will be facing challenges ahead, as from April 2025 there will be significant tax changes taking place which are designed to promote fairness and align tax rules for furnished holiday lettings with those for other property businesses. To mitigate tax liabilities, it is essential consumers seek advice to go through how the abolition of the furnished holiday let tax regime will impact them. These changes will no doubt come as a blow to both existing and prospective landlords, but the demand and profitability of a holiday let could still be worth weighing up. It would be wise for new investors to do their research and pick a property to let with their head, not their heart, and getting advice from a listings service is also wise to explore seasonal dips.
“Holidaymakers may struggle to save enough cash to cover the price of a holiday abroad or have been put off altogether by last minute flight cancellations. A break away in the UK could then be a safer and more affordable alternative, so holiday lets could be a great option. However, costly pitfalls might also arise, so holidaymakers must take time to do their research into the location, time of year, local events and the length of the break to ensure their ideal break away stays within their budget.”
