The number of holiday let mortgages on the market has gone up by a “notable” amount since summer 2020, says Moneyfacts.

It shows that, in August 2020, there were 74 holiday let products to choose from (albeit this having dropped from 162 in March 2020), which has since risen to 186 in September 2021 to 231 mortgages today.

Moneyfacts’ data on this subject also shows that the number of lenders in this market has gone up from 14 in August 2020 to 27 today – “the majority of which are currently building societies,” it adds.

In the meantime, however, the average fixed rate for a mortgage of this type has increased from 3.53% in August 2020 to 3.92% today.

“As the desire for a UK vacation rose due to the pandemic, the prospect of earning some extra income through a holiday let has spurred borrowers into action and lenders are catering for this demand,” says Moneyfacts finance expert Rachel Springall.

“Whether such buoyant activity in the holiday let market will remain is unknown but, encouragingly, research from Hodge revealed a 173% rise in mortgage applications for holiday let in 2021 compared to the previous year.

“If the demand for a UK holiday in 2022 lessens, consumers may still get a reasonable return on any investment, but it’s vital for them to ensure they are offering a let during a bustling season so they do not miss out on a demand spike,” she adds.

Springall concludes her analysis with a warning: “The government announced new measures to ensure homeowners letting out a property are not abusing a tax loophole.

“To qualify for business rates, holiday lets will need to be rented for a minimum of 70 days a year and available to be rented out for 140 days a year under new rules which are to come into force from April 2023, and evidence will need to be shown.

“The move is geared to protect genuine holiday lets and crack down on others, so it will be interesting to see how this will affect those considering an investment, but are perhaps not quite confident they can meet the new requirements.”