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Aspiring holiday let landlords – top tips from a lending expert

With new research finding over 10 million UK adults are considering becoming a holiday let landlord and the volume and total value of completions for new holiday let purchases doubling between 2020 and 2021, Matt Kelly at Together explores why there is so much interest in holiday let properties and provides some top tips for aspiring landlords.

Even before the pandemic, we were seeing dramatic changes across the buy-to-let landscape with holiday lets steadily increasing in appeal – more so than for traditional long-term rental properties – as they allow people to tap into the UK’s many tourism opportunities.

This is a trend we expect to continue, and we expect the holiday let market to remain stable in the years to come. However, there are discounts out there that may be worth considering, particularly if investors are looking to purchase out of season.


Buyers may be able to get an even better deal by finding a property that is in a poorer condition and needs restorative or structural work. Holiday lets located in seaside towns, for example, tend to be more susceptible to damage caused by floods, salt air corrosion, storms and rotting wood. That means they often come with higher maintenance and repair costs, so anyone hoping to scoop a post-pandemic bargain by investing in a doer-upper would be wise to measure the upfront cost against the yearly upkeep.

For holiday let landlords looking to take on a renovation project, it will be better for all the work to be completed in the off-season, so the property is ready to be listed on the holiday let market from spring onwards. Those looking to do this now would have to bear in mind that they’d miss out on the lucrative Christmas and New Year period for holiday lettings, whereas a ready-made property would not require that consideration.

There are lots of options to help finance a holiday let and increased competition has driven down mortgage rates. However, for more unusual properties such as a fisherman’s cottage, getting a traditional loan may be a bit trickier.

Unlike many mainstream mortgage providers, specialist lenders have flexible criteria and can look into a customer’s background, their chosen property, financial position and other factors, to fully assess their position before making a lending decision. Together can provide holiday let finance, available on first and second charge loans, for investors looking to purchase a property or remortgage, with a maximum loan-to-value of 75%.

For anyone considering a holiday let investment, there are a few pros and cons to consider first.

1. Opportunity for higher rental yields

For landlords, holiday lets had already begun to grow in popularity well before Coronavirus, mainly due to the significant tax advantages as they are classed by HMRC as a business (rather than an investment). Combined with the potential for bigger profit margins and a much higher return per night, now could be a great time to invest in a furnished holiday cottage and rent it out to paying customers on short-term lets.

2. Technology does the heavy-lifting

With so much demand for staycation destinations this year, landlords and second homeowners (should they wish to let out their property) can relax knowing that this process has become much simpler to manage online. With the likes of Airbnb and other options helping you get your property listed, you can get yourself set up and ready to welcome your guests with minimal hassle.

3. Getting a mortgage

For those considering a second home, there may some hurdles to overcome if trying to obtain a mortgage via traditional banks or high street lenders due to the increasingly tough affordability criteria. For example, lenders will first need to see strong evidence that you will be able to keep up with the mortgage repayments on your second home – especially if you have a mortgage for your current property. Lenders could also refuse an application depending on the location of your holiday home – particularly if you’re buying a place in an area that has risk of flooding – like in the Lake District.

Instead, to support consumers seeking holiday let properties, Together can provide holiday let finance, available on first and second charge loans, for investors looking to purchase a property or remortgage, with a maximum loan-to-value of 65%.

4. Costs involved

Unlike standard buy-to-lets, holiday lets have to be managed for regular visitors and therefore, there may be higher costs, such as paying for a weekly cleaner or managing agents’ fees, so these are things that consumers should consider before making any rushed decisions.

In addition, if you open your home to paying guests you’ll need to be prepared for potential damages and repairs being needed more regularly – especially after weeks of wear and tear following the summer holiday season.

*Matt Kelly is the senior product manager at Together


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