We've changed our affordability assessment for Holiday Let mortgages
With summer well and truly upon us, and a likely surge in staycations in the next few months, some may be considering investing in a holiday let property. With this in mind, we've made key changes to how we assess affordability for Holiday Let mortgages.
We now evaluate affordability using an average of low, medium and high season expected rental income. Evidence of these averages will be provided by a letting agent on our approved list.
We’ve made this change to better reflect a holiday lets’ earning potential, compared to the previous method of using assured shorthold tenancy (AST) valuations.
Martese Carton, our Head of Intermediary Distribution said: “We’re always looking for criteria improvements which make a real difference to our proposition. This move gives our intermediary partners another solution for their clients and means more accurate rental projections across the peak holiday seasons and the remainder of the year.
“Holiday lets are a popular option for Buy to Let borrowers and this change will be welcome news for those who are looking to diversify their property portfolio in this direction, especially at a time when more of us are taking staycations.
“We continue to take a responsive and flexible approach to our product offering, reaffirming our commitment to the intermediary market.”
This is the latest improvement we’ve introduced to support borrowers in recent months, including adding new 75% loan to value (LTV) products to our Holiday Let range. We’ve also improved our minimum income requirements on this type of product and will now accept joint applicants with a total income of £60,000, where one applicant alone earns less than £40,000.
You can view product and criteria information here.