The Intermediary – September 2026 - Flipbook - Page 12
BUY-TO-LET
In focus
Even Leeds, having taken one of the clearest
stances on holiday let lending, places its
restrictions within this much wider challenge.
LDS FIRM
DEMAND HOLDS
Carton says: “What remains consistent is the
need for more homes that local people can afford
to buy and live in. Increasing housing supply and
ioR sales
KeViN AitKeN, seNioR
t CUMBeRlaNd
MaNaGeR at
BUildiNG SoCiety
helping first-time buyers overcome the barriers
to homeownership remain some of the most
important ways to address housing challenges.”
Localised pressure
While measures aimed at curbing holiday lets
may respond to genuine housing pressures in
some communities, applying the same approach
more widely risks overlooking regional dynamics.
What stands out to me is that holiday let
demand has proved remarkably resilient. Our recently
published Holiday Let Index found 88% of brokers had seen
enquiries increase over the previous 12 months. That tells
us investors haven’t simply walked away because the tax
treatment has changed.
Instead, they’re becoming more commercially-minded.
We’re seeing owners work harder on occupancy, pricing and
costs, alongside more experienced landlords borrowing more
cautiously. Nearly half of those surveyed actually reported
higher profitability following the abolition of FHL tax relief,
which is quite telling.
There’s also an important distinction to make in the
housing debate. Holiday lets can clearly put pressure on
housing in certain tourist hotspots, but this is a highly local
market. Reducing their numbers doesn’t necessarily mean
those homes suddenly become affordable to local families.
Property type, values and local incomes still come into play.
We also shouldn’t overlook the contribution visitors
staying in holiday lets make to local economies, supporting
pubs, restaurants, shops and other businesses that often rely
heavily on tourist spending.
That local variation is why I’d be wary of broad-brush
policy. Where there is clear evidence of pressure, targeted
action may well be justified, but the answer in one coastal
town won’t necessarily be right for another.
For brokers, meanwhile, this remains a specialist market
where good advice has real value. Seasonal income and
booking patterns require a different underwriting approach
to conventional BTL. With 30% of owners planning another
purchase, the opportunity is certainly still there, but success
will depend much more on understanding the property, its
location and how the numbers work throughout the year.
The question for policymakers is how far
intervention should go.
Tuck notes: “It is important that policymakers
focus on the properties which would be
appropriate for locals, dependent on location
and affordability, rather than a blanket ban
on holiday lets which would stop the use of
properties which would never likely be used as
local residential stock, and have a significant
impact on tourism and the local economy.”
Similarly, Carton places much of the
responsibility for striking this balance at a local
level, saying: “We believe local communities
are best placed to understand their own needs,
and it's important they have the flexibility and
tools to respond to them in a way that works for
their area.”
The lending market itself reflects this regional
variation. While Leeds has chosen to restrict
holiday let lending where it believes local
housing pressures warrant it, other lenders are
moving in the opposite direction.
Hanley Economic Building Society, for
example, recently entered the holiday let market
in response to broker demand.
Ward explains: “We were consistently hearing
from brokers that there was demand for a lender
like Hanley in this space, and that we were
missing from conversations where our flexible,
common-sense approach would be valued. The
product was born from intermediary demand
rather than us simply deciding we wanted to
enter the market.”
Meanwhile, Hodge has also responded to
demand, increasing its maximum loan-to-value
increase in line with a corresponding reduction
10
(LTV) and loan size for holiday let lending this
in holiday home ownership in traditional
year. Ford says: “We constantly evaluate our
tourist areas. The issue is far more complex
products and criteria to ensure we continue
than that, particularly in parts of the country
to offer solutions to a wide range of borrowers.
where jobs, wages, transport links and other
Demand remains strong within the holiday let
economic factors have a far greater impact on
sector, and the changes are designed to meet the
homeownership and housing availability.”
evolving needs of our customers and brokers.”
The Intermediary | September 2026
