The availability of holiday let mortgages has risen by 23% from 362 last year to 445 this month, according to new analysis by Moneyfacts.

Average rates have come down by 96 basis points from 7.16% to 6.2% over the same period.

There are currently 34 different lenders within this market, two more than in August 2023, the majority of which are building societies.

Moneyfacts finance expert Rachel Springall says: “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. 

“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.

“To mitigate tax liabilities, it is essential consumers seek advice to go through how the abolition of the furnished holiday let tax regime will impact them. 

“These changes will no doubt come as a blow to both existing and prospective landlords, but the demand and profitability of a holiday let could still be worth weighing up.

“It would be wise for new investors to do their research and pick a property to let with their head, not their heart, and getting advice from a listings service is also wise to explore seasonal dips.”