Leeds Building Society has introduced a range of new mortgage products for those who wish to buy a holiday property and rent it out to tenants. The dedicated holiday let products have been introduced as a result of increasing demand among UK residents who wish to take on a holiday property.
The use of holiday cottages in the UK has doubled between 2008 and 2011 and is still on the increase in 2013. According to Travelodge, two thirds of British people will take a summer holiday this year, which is 41% more than the number seen last year. Holiday lets are attracting buyers as they are able to make a profit from renting them to holiday tenants but they can still make use of them when they are not being let out. These lets are like a second home and many holiday makers are taking advantage of the new mortgage packages available. Careful selection of a property in a lucrative area can result in high rental returns for holiday let landlords and remove the uncertainty of obtaining a tenant. A two bedroom holiday rental in Keswick can be let out for £350 per week, and this can rise to £650 during peak holiday periods. This means an average rental income of £15,000 which is significantly higher than a residential property let.
Holiday rentals generated more than £540 million in income for UK buyers in 2011 alone. However, the new buy to let ranges available will create more options for those wishing to buy a property and let it out during holiday season. The new packages have made their best buy to let fixed rates available to those wishing to buy a holiday let making it easier for new buyers to choose a fix that best suits their timeframe and their requirements.
In addition, Virgin Money has also introduced some changes to its residential and buy to let mortgage range, offering more attractive packages for landlords buying to rent. Yorkshire Building Society has offered more than 1,600 best buy products in the first six months of 2013. They state that they offer a wide range of products available for buy to let borrowers. Many lenders are joining the Help to Buy scheme to aid new buyers in getting on the property ladder. The scheme allows lenders to offer tracker rates starting from 3.29% and home buyers only need a 5% deposit on the value of the loan.