Your home may be repossessed if you do not keep up repayments on your mortgage.
Match the mortgage to the property’s real use
A holiday let is usually intended for short stays by paying guests, rather than occupation under a standard residential tenancy. That use can require different lending from an ordinary buy-to-let mortgage or a second-home mortgage. Describe the planned letting and personal use accurately before comparing products.
PMS Mortgages combines mortgage advice with over 20 years of experience as professional landlords. Ria Ali helps clients in Croydon, Purley, London and across the UK review holiday-let borrowing. Practical experience informs the questions we ask about running costs, evidence and future plans, but it does not guarantee a property will qualify for lending.
Seasonal income and realistic operating assumptions
Holiday-let income can vary across the year. A strong peak-season weekly rate does not mean the property will achieve that return every week. Occupancy, cancellations, local demand and the cost of managing bookings all affect the operating position. Prepare figures that distinguish gross booking income from the money remaining after costs.
A lender may have specific requirements for assessing expected rental income and may request evidence from an appropriate letting agent. Existing booking history can also be useful where available. Do not rely on a property advert’s optimistic projection as a guaranteed income stream or a promise of the amount a lender will offer.
Personal use, occupancy and lender conditions
Tell us whether you want to use the property yourself, how often and whether family or friends will stay. Lender conditions can restrict personal occupation or set other requirements for the letting arrangement. A product suited to one owner’s plans may not suit another’s proposed use.
Also explain whether bookings will be short stays, longer occupation or a mixture. Changing the use after completion may require lender consent or different borrowing. Check the mortgage conditions before advertising a property on a booking platform, and do not assume an ordinary residential mortgage permits commercial holiday letting.
Check legal, planning and property restrictions
Local planning requirements, title restrictions, lease terms and development conditions can affect whether a property can be used as a holiday let. An apartment or property on a managed development may have restrictions beyond the mortgage lender’s criteria. Your solicitor should review the legal position before you commit.
The property’s construction, condition and location also matter to the lender. A lease or occupancy restriction may affect marketability. Provide the particulars and known restrictions early. A mortgage valuation is for the lender’s purposes; consider an appropriate independent survey to understand condition and potential repair costs.
Budget for management and property costs
Allow for cleaning, laundry, booking-platform or agency charges, utilities, insurance, furnishings, maintenance and periods without guests. The owner may be responsible for bills that a long-term tenant would otherwise pay. Replacing furnishings and keeping the property ready between bookings also creates ongoing costs.
Keep a reserve for unexpected repairs and weaker seasons. When comparing mortgages, include product fees, legal costs and early repayment charges alongside the rate. Adding a fee to the loan increases borrowing and may increase interest paid. Lending approval should not be treated as an assessment that the investment will be profitable.
Tax rules have changed
The former Furnished Holiday Lettings tax regime has been abolished. HMRC states that the rules ceased to apply from 6 April 2025 for Income Tax and Capital Gains Tax and from 1 April 2025 for Corporation Tax. Avoid relying on older articles advertising the previous treatment as a current benefit.
Your accountant should assess the tax consequences of your ownership structure, borrowing and intended use. Personal ownership and limited-company arrangements are not interchangeable, and moving a property between them can create costs. Mortgage advice addresses the lending options; it does not replace specialist tax or legal advice about the investment.
Purchases, remortgages and an application checklist
For a purchase, bring the price, deposit source, property particulars, intended occupancy and a realistic rental assessment. For an existing holiday let, include booking history, mortgage statements, costs and any changes to use. We confirm the relevant lender’s evidence requirements and explain the application stages.
When refinancing, compare available remortgage options and any existing-lender products that fit the arrangement. If you are considering a property primarily for personal use, see our second-home mortgage guidance. For longer-term tenants, read the buy-to-let guide. The appropriate route follows the actual use and circumstances.
Frequently asked questions
Can I use a standard buy-to-let mortgage for holiday bookings?
Not automatically. Standard buy-to-let conditions may not permit the intended short-term letting. Check the appropriate lender criteria and permissions before proceeding.
Will the lender count all projected booking income?
Rental assessment methods differ. The lender may require specific evidence and apply its own calculations. Projected bookings do not guarantee borrowing or future revenue.
Can I stay in my holiday let myself?
Personal-use conditions vary by lender and property. Explain your intended occupation before applying so the relevant restrictions can be assessed.
Discuss your plans with Ria Ali, Principal Mortgage & Protection Adviser. Book a consultation with PMS Mortgages for advice in Croydon, Purley, London and across the UK. Mortgage approval depends on your circumstances, the property and the lender’s assessment.