Holiday let and city breaks

"Lenders don’t like city pads for holiday lets for obvious reasons. You don’t go to a city for a typical ‘holiday’. You may go for a weekend trip, but most people most of the time would stay in a hotel. Holiday lets are based upon low middle and high season rents making assumptions about occupancy on full weeks. If anyone came to me wanting a holiday let in a city I’d be recommending they seek mental health advice from a qualified professional. Whilst some lenders are ok with Airbnb scenarios, it’s so niche an area of the market few would willingly get involved."

Generally speaking, holiday lets in the City is not something I come across often. It is not a popular investment decision as for short term city stays most people would choose a hotel. However, in some situations such as a London flat owner working away and wanting to short term let via Air B&B it can be beneficial. There are lenders who will lend based on Airbnb rentals in the City under their holiday let products, but of course there are usually a lot of criteria. For example, most lenders will not allow this on a purchase. It is possible for a remortgage however, the caveat there is most lenders want a proven track record of AirBnB - not so good for the first time landlord. Holiday Lets in the City is not a huge area of the market."

"The criteria around holiday lets isn't as straightforward as a regular buy to let due to the amount of risk involved and the higher chance of void periods for landlords. All are factored in by lenders in the holiday let space as some lenders need to consider and may require confirmation of low, medium and high season rental yield. "City locations tend not to be somewhere people will go for a holiday and if they do they will more than likely stay in a hotel or AirbnB which tend to be more popular for city locations. But there are not as many lenders in the space as regular buy to let. "Know your numbers and be prepared to pay higher rates than a regular buy to let and also be prepared for lenders to be ultra-cautious and also be prepared for a massive NO from a lender especially for a city holiday let as some lenders may not even entertain this from the get-go as they only prefer rural locations."