The October half term holiday was unusual – even by Covid-19 standards. We’d all become used to the unpredictability of holidaying abroad, quarantines and ‘no go’ areas overseas with thousands deciding to take a UK ‘staycation’ as a failsafe alternative.

Sadly in the end, this didn’t work for some. The half term getaway became a postcode lottery with restrictions imposed depending where you lived in the UK and where you intended to travel.

Michael Ring from Cheshire told us: “It’s been a really strange time trying to plan a short break and rent a holiday cottage. Traditionally I’d take a property for the week in Anglesey, North Wales by heading a short distance South or consider a rental up in the Lake District. Both options are in easy reach.

“Of course due to new restrictions in Wales it’s not been possible to secure a holiday let creating an unexpected scenario for both holiday makers like myself and those offering property for rent there. As I made my final plans, one holiday cottage owner was able to secure rental income whilst the other couldn’t.”

Mortgage enquiries for holiday let properties have hit the roof at Harpenden Building Society during 2020 recognising that they are a great investment opportunity for increasing numbers. This said, scenarios like the October half term restrictions outline wider factors needing to be taken into account when planning to buy a property for this purpose.

Advice for clients considering a holiday-let purchase 

We’ve compiled a few guidelines that can help brokers and their mortgage clients understand the general, long term implications of a holiday let purchase and what to look out for when it comes to ongoing costs. We hope this overview helps:

• A separate savings account is advisable with monies to cover the mortgage for at least three months in the event that the property is unoccupied or inhabitable for a period of time. Landlords should not be solely dependent on rental income.

• Clients need to have a clear idea of the costs involved in running another property. Even if the property is not occupied throughout the year, it will still require constant maintenance and upkeep on both a practical and aesthetic level.

• Clients should consider having the property professionally managed at the busiest times of the year. At peak times, the change-over period between guests may be a short window where bedding needs to be changed and the property thoroughly cleaned. This is particularly important during the pandemic where properties will require a deep clean.

Harpenden’s experience

Although we use rental income when considering applications, we also take a holistic view of a client’s financial circumstances to ensure they have surplus income and funds available to afford the mortgage and running costs for up to three months.

Sometimes, during our underwriting process, we uncover that the full costs of running a property have not been properly considered in this way and hence the application is unable to progress.

It is important for clients to understand how important it is to keep up the maintenance of their property.

A holiday let takes a lot of wear and tear and must be looking its best at all times in an age where people are constantly taking and posting photos to Instagram.

Additionally, social media allows anyone to be a critic – and criticise they shall! Expectations are high and the most successful holiday let owners fully understand and anticipate their guests’ needs and requirements.

Specialist lenders will vary in their income requirements. At Harpenden, a minimum income of £30,000 is required alongside the additional financial requirements mentioned above.

All of our mortgages are manually underwritten allowing us to fully understand and analyse complex financial situations and work out a solution for clients and brokers alike.

If you think your client has a strong application for a holiday let property, a specialist lender like ourselves, will be delighted to discuss the options further. Click here for more information. 

 Jean Errington is business development manager at Harpenden Building Society