The Intermediary – September 2026 - Flipbook - Page 20
BUY-TO-LET
In focus
Looking beyond
rate in holiday
let lending
A
client wants to buy
a holiday let. They
plan to advertise
it on Airbnb, stay
there themselves for
several weeks each
year, and have never previously been a
landlord. Before price even enters the
conversation, there are already several
points for brokers to consider.
How much personal use will
a lender permit? Does landlord
experience maer? Are there
restrictions around how the property
is marketed? Add an applicant who is
an expat or earns income overseas and
the case takes on another dimension.
This is why criteria play such an
important role in holiday let lending.
The people buying these properties,
and their reasons for doing so, can
differ considerably. As a result, a
product that works well for one client
may be unsuitable for another, despite
looking aractive on rate.
All over the map
Personal use is a prime example.
While some borrowers will view a
holiday let purely as an investment,
others may want to generate rental
income while enjoying the property
themselves at certain times of the year.
Clarifying this is vital, as lenders can
place different limits on how oen an
owner is permied to stay there.
Experience can also influence the
options available. There’s no reason to
assume that someone buying a holiday
let will already own rental property.
For some, it may be their first step into
leing, and lender appetite for firsttime landlords can vary.
The strength of the wider
application therefore needs to be
considered alongside previous
experience, rather than the laer
automatically defining the case.
18
The Intermediary | September 2026
The way holiday properties aract
guests has changed, too. Online
booking platforms such as Airbnb
have become an established part of the
sector, giving owners a direct means
of marketing their property. Yet
lending requirements around leing
arrangements can differ, so the client’s
plans for generating bookings need to
form part of the mortgage discussion.
Then, there are applicants whose
financial circumstances sit outside a
standard profile.
Expats may want to buy a holiday
property in the UK, for example,
while other borrowers could receive
some or all their earnings overseas.
Assessing these cases can involve
additional considerations around
income evidence and currency,
making lender appetite a particularly
important consideration.
Geography can have an influence,
too. Holiday lets are not limited
to established coastal resorts or
traditional countryside destinations,
and buyers may identify opportunities
across the UK. A lender’s geographical
policy can therefore determine
whether a property is eligible before
other aspects of an application
are considered.
What makes this particularly
relevant for brokers is the way these
factors can overlap. There is no neat
dividing line between the first-time
landlord, the expat borrower and the
owner looking for personal use. The
same client could fall into two or three
of these categories.
That places greater emphasis on
establishing the full circumstances
behind an enquiry before
concentrating on product selection.
Building a case
Inevitably, as lenders, we have a
balance to strike. Criteria need to
SAMANTHA WARD
is commercial director at Hanley
Economic Building Society
A strong rate is
of little use if [the]
financial circumstances
do not meet the lender’s
requirements”
protect responsible lending standards
and ensure the underlying proposition
is viable, but this does not necessarily
require every applicant to fit into the
same profile.
This is an area where building
societies can play an important role.
The ability to assess cases individually
can be particularly useful when an
application contains an element
that does not fit neatly within an
automated or highly standardised
lending model.
None of this diminishes the
importance of price. Holiday let
owners will naturally want a
competitive mortgage, and brokers
will continue to compare rates as part
of their advice. But price cannot be
viewed separately from eligibility.
A strong rate is of lile use if the
client’s intended use of the property or
financial circumstances do not meet
the lender’s requirements.
Equally, a borrower should not
necessarily be viewed as unsuitable
simply because their circumstances
are less common.
Ultimately, the strongest holiday
let propositions will be those that
combine competitive pricing with
criteria that reflect the increasingly
varied nature of the market. ●
