How to qualify for a holiday let mortgage in 2025

Joe Stallard from House and Holiday Home Mortgages shares five key tips to help holiday let investors.

With summer in full bloom, buying a holiday let property is top of mind for a number of people across the UK, whether as a way to generate income or personal use and enjoyment. But before you can start welcoming guests to your coastal cottage or countryside retreat, you’ll need to secure the right finance. Here’s what it takes to qualify for a holiday let mortgage in 2025.

1. Understand what a holiday let mortgage is

A holiday let mortgage is distinct from a standard residential or buy-to-let mortgage. It’s specifically designed for properties that will be rented out to short-term guests rather than long-term tenants. These mortgages are assessed differently due to the seasonal nature of income and the different risk profile.

2. Meet the lender’s criteria

Lenders typically require:

• A larger deposit – usually at least 20–25% of the property’s value.

• Strong personal income – there are lenders with no minimum income requirements, but having a good level of earnings can open up more lending options.

• Good credit history – a clean credit file is pretty essential. If there are indiscretions on your credit report, be prepared to explain what happened.

• Experience as a landlord – while not always mandatory, it can strengthen your application.

  
  

It’s also important to understand how your lender will let you use the property, as they often have different personal usage limits.

3. Demonstrate affordability

Unlike traditional buy-to-let mortgages, holiday let lenders assess affordability based on projected rental income throughout the year, which obviously includes peak and off-peak seasons. For most lenders, you’ll need to provide a holiday letting agent’s income forecast.

There are some that will use a buy-to-let affordability model or a residential affordability model, so understanding exactly what each lender is looking for is important.

4. Be aware of tax changes

Get clued up on the Furnished Holiday Lettings (FHL) tax regime, as well as other local and national regulations. While these don’t affect mortgage eligibility directly, it may impact your net returns – so factor this into your financial planning.

5. Choose the right property

Location is key. Lenders typically favour properties in established tourist areas with strong year-round appeal – think the Lake District, Cornwall, or the Cotswolds. But with the growth in short-term lets, more are getting comfortable with urban locations, or other areas that attract people outside of the traditional UK holiday scene.

The property must also meet certain standards. This means that it must be somewhere that people are going to want to stay and that a lender can see a clear demand for.

Summary

Qualifying for a holiday let mortgage in 2025 is made a lot easier with careful preparation.

Know your numbers, know your market, and understand why you’re buying that property and who’s going to rent it.

With the right approach, it can be a rewarding investment – both financially and personally.

Need a mortgage? Get in touch with Joe and the team at HHH Mortgages today:

• Call: 01453 887179

• Email: hello@hhhmortgages.com

• Visit the website