Boom for holiday let mortgages

Boom for holiday let mortgages

0:01 AM, 20th August 2024, About 3 months ago 2

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The number of mortgage options available for holiday let landlords has significantly increased, an analysis reveals.

But tax changes will impact profits from next year.

According to Moneyfactscompare.co.uk, there has been a surge in holiday let mortgage deals, with the number of options jumping from 362 in August last year to 445 currently.

This rise is accompanied by an increase in lenders catering to holiday lets with two new lenders entering the market, bringing the total to 34.

Building societies remain the dominant players in this space.

Availability of holiday let deals

Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “The buy to let market has undergone its fair share of upheaval over the past few years, with rising interest rates and tax perks quashed.

“However, a small part of this market has flourished over the past couple of years, with the availability of holiday let deals rising.”

‘Significant tax changes taking place’

She adds: “Holiday let owners will be facing challenges ahead, as from April 2025 there will be significant tax changes taking place which are designed to promote fairness and align tax rules for furnished holiday lettings with those for other property businesses.”

Holiday let landlords should work to mitigate tax liabilities when the FHL regime ends, but Ms Springall says that the demand and profitability of holiday letting could still be worth investing in.

‘Pick a property to let with their head’

New holiday let investor should also do their research and ‘pick a property to let with their head, not their heart’, Ms Springall advises.

Also seeking advice from a listings service would be wise to assess when the seasonal dips occur.

There is also strong demand from Brits wanting a staycation, particularly from those who can’t afford to jet off abroad, she adds.


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Cider Drinker

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8:56 AM, 20th August 2024, About 3 months ago

โ€˜โ€ฆ๐ฐ๐ก๐ข๐œ๐ก ๐š๐ซ๐ž ๐๐ž๐ฌ๐ข๐ ๐ง๐ž๐ ๐ญ๐จ ๐ฉ๐ซ๐จ๐ฆ๐จ๐ญ๐ž ๐Ÿ๐š๐ข๐ซ๐ง๐ž๐ฌ๐ฌ ๐š๐ง๐ ๐š๐ฅ๐ข๐ ๐ง ๐ญ๐š๐ฑ ๐ซ๐ฎ๐ฅ๐ž๐ฌ ๐Ÿ๐จ๐ซ ๐Ÿ๐ฎ๐ซ๐ง๐ข๐ฌ๐ก๐ž๐ ๐ก๐จ๐ฅ๐ข๐๐š๐ฒ ๐ฅ๐ž๐ญ๐ญ๐ข๐ง๐ ๐ฌ ๐ฐ๐ข๐ญ๐ก ๐ญ๐ก๐จ๐ฌ๐ž ๐Ÿ๐จ๐ซ ๐จ๐ญ๐ก๐ž๐ซ ๐ฉ๐ซ๐จ๐ฉ๐ž๐ซ๐ญ๐ฒ ๐›๐ฎ๐ฌ๐ข๐ง๐ž๐ฌ๐ฌ๐ž๐ฌ.โ€™

I think youโ€™ll find the changes that will be effective from 2025 will just make holiday lettings equally unfair.

The government introduced an unfair tax regime and ridiculous regulations that encouraged some landlords to switch to holiday letting.

Now, the government is trying to dissuade private landlords from switching their properties to holiday lets - by making the FHL scheme equally unfair. However, FHL will remain far more attractive to property owners as Labour introduce yet more anti-landlord regulations.

Dennis Forrest

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10:29 AM, 20th August 2024, About 3 months ago

Reply to the comment left by Cider Drinker at 20/08/2024 - 08:56I agree entirely Instead of upgrading the conditions of AST's to mirror some of the advantages of FHL's for example full tax relief on mortgage interest they have removed most of the advantages down to the same onerous conditions of AST'S.
The main trump card for FHL's is the ability to easily get your property back if you want to sell it. Just be careful that you never let to anyone for more that the maximum 31 continuous days. This would break HMRC rules and might create unintentionally a more permanent tenancy.
According to GOV.UK, HMRC rules state that furnished holiday lets (FHLs) must not be let for more than 31 continuous days, unless there are unforeseen circumstances. For example, if a guest falls ill, has an accident, or their flight is delayed, they may need to extend their stay.

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