Having recently completed the design and build of a new responsive website for this luxury holiday cottage in Dartmoor (see image below) our guest contributor was very interested to read in the financial news that a new range of mortgages has been launched for borrowers with holiday let properties, with rates starting below 4%.
Between 2008 and 2011, the use of UK holiday cottages doubled. In 2011 holiday lets generated £540 million, according to the Holiday Lettings Insight Report.
Leeds Building Society said that the market offers an attractive alternative to traditional buy-to-let. For example, a two-bedroom holiday cottage in Devon let for 39 out of 52 weeks per year can attract rent of around £390 per week, rising to £850 in peak periods. This would provide an annual rental income of around £18,000.
Leeds has recently launched a two-year fixed rate holiday let mortgage at 3.4 per cent with a £999 fee, a three-year fixed at 3.99 per cent with a £199 fee and a five-year fixed at 4.29 per cent with a £999 fee.
The mortgages require a minimum deposit of 30 per cent and the borrower must earn at least £40,000 per year.
The rental income averaged out across a 12-month period must be at least 130 per cent of the mortgage payments.
The home loans are available on properties worth at least £75,000 and the maximum mortgage value is £250,000.
The products are only available to existing home owners and not first-time buyers.
Kim Rebecchi, sales and marketing director of Leeds Building Society, said: “Holiday Let provides an appealing alternative to buy-to-let with attractive rental returns and a second home rolled in to one.