Keystone has become the latest lender to enter the holiday let market amid strong demand from landlords.

Borrowers looking to purchase or remortgage a holiday rental property within England and Wales can now choose to do so using any product from the lender’s specialist buy-to-let range, which includes green mortgage options.

Keystone will lend up to 75% LTV on holiday lets for those wanting to borrow up to £750,000 and 70% LTV for those wanting to borrow up to £1m.

To qualify, borrowers must earn a minimum of £40,000 a year, must own one buy-to-let and their holiday let must be furnished. The rental agreement must not exceed six months.

Rates start at 3.34% for a two-year fixed rate up to 65% LTV with a 2% arrangement fee and £145 application fee

At 75% LTV, a two-year fixed is 3.54% up to 75% with the same fees.

A five-year fix at 65% LTV is 3.49% or 3.69% at 75% LTV with the same fees.

For properties that are five years old or more and have an EPC rating of C or above, Keystone offers rates starting from 3.24% within its green mortgage range. 

Holiday let properties will be valued and rental coverage will be assessed on the same basis as a standard buy-to-let..

Keystone Property Finance marketing director Phil Riches says: “Staycations have always been popular with British holidaymakers but even more so with the restrictions on international travel the past 18 months.

“However, despite the popularity of domestic holidays, there are very few lenders out there offering loans on holiday lets.

“Brokers have been telling us that there is big demand among their client bases for holiday lets and so we decided to do something about it.

“We also wanted to give borrowers a good selection of products to choose from, which is why we have opened up our entire specialist range – including our popular green range – to those wishing to buy or remortgage a holiday property within England and Wales.

“We are confident that demand for home-based holidays is here to stay and we are very excited now to be a part of this fast-growing part of the market.”