Expat holiday buy-to-lets are getting more profitable.

 

Expat buy to lets are getting more profitable. The rise in staycationing has created an increase the use of properties as holiday lets. Expats are attracted by the potential returns and keen to diversify their portfolios. Existing expat buy-to-let landlords are expanding their portfolios into holiday let. As are would-be investors who dream of owning a holiday cottage that will pay for itself.

As a result, lenders have witnessed a rise in mortgages for holiday let mortgages. Loans for properties that will be rented out on a short-term basis, for at least part of the year to tourists – as a business.

These commercial transactions are not difficult to administer, due to the power of the internet, but like all niche products, they do require a certain level of understanding.

The number of lenders in the expat market is relatively small. Although this is changing. In the past, holiday let mortgages were usually confined to mutual societies. However, in recent years other lenders, including some specialist expat funders, have joined the fray.

So, not the largest selection in the world but certainly enough to find solutions to fit a variety of expat borrowing circumstances.

Recently, there have been reports in the press of landlords turning their buy-to-let property into holiday accommodation.

For the most part, standard buy to let mortgages are designed for use on properties that will be let for a minimum of six months on assured shorthold tenancy agreements (ASTs).

As such, the majority of products do not cater for holiday accommodation. As such expat borrowers risk breaking the terms of the mortgage contract if they let the property out on a short-term basis.

This should not deter expat borrowers, as holiday let terms can actually be far more favourable.

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