UK firms expand holiday let mortgage programmes
UK: Multiple UK building societies have created new mortgage programmes designed specifically for the holiday home buy-to-let market.
YBS, Teachers for Intermediaries and Leeds Building Society have all introduced mortgages designed to capitalise on UK holiday let market growth.
These companies are taking advantage of a twin set of developments within the British economy. Firstly, they hope to take advantage of the growth of staycations within the UK.
According to data gathered by Visit Britain, 99 million residents took trips in England this past year, leading to £19.4 billion worth of spending. Destinations like Cornwall, the Lake District, Devon and Dorset have seen significant interest as the UK has given citizens the opportunity to travel freely again.
Ralph Punter, business development manager at Teachers for Intermediaries, said: “As our own research has shown, consumer demand for UK based holidays has increased as a direct result of the pandemic, a trend we expect to continue into next year too. Combined with the recently announced stamp duty holiday, we expect to see increased interest in the holiday let market from investors.”
The second development is the reduction of the stamp duty by Chancellor Rishi Sunak for the first £500,000 of any potential property purchase. The removal of these taxes has reportedly increased interest in holiday let purchases by around 25 per cent.
Matt Bartle, Leeds Building Society’s Director of Products, said to PropertyWire: “We were the first lender to launch a range of dedicated holiday let mortgages back in 2013 and our research has shown traditional locations such as the South West, Yorkshire and the Lake District remain popular with holidaymakers, with many favouring a coastal break. The recent government announcement on stamp duty is likely to encourage more interest in the buy-to-let market, including holiday lets.”
The various programmes offer fixed rates between 3.85 and 2.84 per cent, ranging from 60 to 70 per cent loan-to-value.