Holiday let mortgages
Mortgages for short-term/holiday lets are a distinct product from standard buy-to-let, assessed on seasonal rental potential rather than a single tenancy. The tax treatment also changed significantly from April 2025 — worth knowing before you assume older articles still apply.
- Plain English, about 6 minutes
- General information, not advice
- No invented rates
How holiday let mortgages differ
A standard BTL mortgage is normally written on the basis of a long-term residential tenancy. Letting a property short-term to holidaymakers — via sites like Airbnb or a local agency, or as a traditional self-catering cottage — usually needs a specific holiday let mortgage, offered by a narrower pool of specialist and mainstream lenders.
How income is assessed
Because holiday let income is seasonal and less predictable than a fixed monthly rent, lenders typically ask for projected income figures — often a blend of low, medium and high season estimates — usually provided by a local letting agent rather than assumed by the lender or borrower. Affordability is then checked against this projection using a rental-cover approach broadly similar in concept to standard BTL, though the exact method varies by lender.
Tax change: Furnished Holiday Lettings (FHL) regime abolished from April 2025
Older articles online may describe special tax perks for "Furnished Holiday Lettings" (FHL) — such as different capital allowances, more generous finance-cost treatment, and certain Capital Gains Tax reliefs. The UK Government abolished the FHL tax regime with effect from 6 April 2025 (income tax) and 1 April 2025 (Corporation Tax), broadly bringing the tax treatment of qualifying holiday lets into line with other property income. If you're researching the tax side of a holiday let, make sure any source you're reading is dated after that change, or check current guidance directly on gov.uk or with an accountant.
Other things to check
- Planning and local rules. Some areas restrict short-term letting or require registration — increasingly common in popular tourist areas — so check local planning and any registration scheme before you commit.
- Insurance. Standard landlord insurance may not cover short-term holiday letting; you'll usually need a specific holiday let policy.
- Furnishing standard. Holiday lets are typically let fully furnished to a higher standard than a long-term rental, which affects your setup costs.
- Personal use. If you also want to use the property yourself for part of the year, say so upfront — this can affect both the mortgage product and how income/tax is assessed.
FAQ
Can I let a property on Airbnb with a standard BTL mortgage?
Not necessarily — check your mortgage terms and, if needed, ask your lender or a broker before short-term letting a property that's mortgaged as a standard buy-to-let. Terms vary by lender.
Do holiday let mortgages always need a higher deposit?
Requirements vary by lender and can be higher than standard BTL, reflecting the more specialist, income-variable nature of the asset — check current requirements directly rather than assuming a figure.
Next step
Get an income projection from a local letting agent, confirm the current tax position with an accountant, then compare independent brokers who cover holiday let lending.