Holiday Let Investment Finance
Finance the full holiday let investment - bridging to purchase and refurbish, exit to specialist furnished holiday let mortgage assessed on projected annual income. Gross yields of 6-12% on the right property.
Holiday let - a specialist investment requiring specialist finance
A well-chosen furnished holiday let - coastal, rural, or tourist location, right specification, right platform presence - generates 6-12% gross yields against a standard residential let's 4-6%. The investment case is compelling, but the route to finance is not the same as standard buy-to-let.
Holiday let mortgages are assessed on projected annual income from a specialist letting agent's income schedule or RICS valuer's projected income - not on a single AST tenancy figure. This typically produces a higher assessed income, supporting a larger mortgage, but requires specialist FHL lenders who understand the income methodology.
The acquisition finance - particularly for properties needing refurbishment before they can attract peak-season rental income - is almost always bridging. Doulton Bridging Finance arranges the bridging acquisition, advises on the refurbishment specification for maximum FHL income, and places the specialist FHL mortgage exit with lenders who understand the income model.
Indicative Rate Guide
| Stage | Rate From | LTV | Term |
|---|---|---|---|
| Purchase bridge | 0.55% pm | Up to 75% | 3-12 months |
| Purchase + refurb bridge | 0.65% pm | Up to 75% | 6-18 months |
| FHL mortgage exit - standard | From 3.9% pa | Up to 75% | 2-30 years |
| FHL mortgage exit - higher yield | From 3.7% pa | Up to 75% | 2-30 years |
Rates are indicative and subject to individual assessment. Your actual terms may differ based on the specifics of your case.
Six factors in holiday let investment finance
Location and Seasonal Demand
FHL income is location-dependent. Coastal properties in peak season can achieve £2,000+ per week; rural properties in areas with year-round demand generate more consistent monthly income. The location determines the FHL income schedule that the mortgage lender will accept.
FHL Mortgage Income Assessment
FHL mortgages are assessed on projected annual income from a specialist letting agent's schedule or RICS valuer's projected income - typically 28-30 weeks at short-term rental rates. This methodology produces higher assessed income than a single AST, supporting greater borrowing against the same property.
HMRC FHL Qualifying Criteria
For full FHL tax advantages (capital allowances, mortgage interest relief in full), the property must be available for 210 days and actually let for 105 days per year. The tax treatment significantly affects the investment return and should be modelled before purchase.
Refurbishment Specification
Holiday let income is strongly influenced by property specification. En-suite bedrooms, hot tubs, fast broadband, and high-quality fixtures achieve significantly higher nightly rates than basic specification. The refurbishment budget - financed through the bridge - should be optimised for FHL income, not minimised.
Platform Strategy and Management
Most FHL lenders accept Airbnb and other short-term rental platform income as evidence for the mortgage application. A professional letting agent's income schedule - even for a property not yet let - is the standard evidence base. We advise on which agents and platforms produce lender-acceptable evidence.
Bridging to FHL Mortgage Timeline
The FHL mortgage exit depends on the property being in a lettable condition - most FHL mortgage lenders require the property to be ready to let before they advance. Refurbishment must be completed within the bridge term, with enough time for the mortgage application to complete before the bridge expires.
How we structure your holiday let investment finance
FHL income modelling upfront
Before the bridge is drawn, we model the projected FHL income for the specific property and location - using specialist letting agent contacts where needed - and confirm the FHL mortgage exit works at the planned LTV.
Purchase bridge arranged
Bridging finance arranged for the purchase and, where required, the refurbishment costs. Bridge term set to cover refurbishment and the FHL mortgage application period.
Refurb specification for maximum FHL income
We advise on the refurbishment specification that maximises projected FHL income - the income that determines the FHL mortgage amount. The right specification can materially increase the exit mortgage relative to a minimum-cost refurbishment.
FHL mortgage placed with specialist lenders
The FHL mortgage exit is placed with specialist lenders who understand per-week and per-annum income assessment. These are not standard BTL mortgage lenders - they are specialist FHL lenders with different income models.
Purchase, refurbish, and exit with one broker
Bridging to purchase and refurbish, then a specialist furnished holiday let mortgage exit assessed on projected annual income - modelled together before the bridge is drawn.
Frequently asked questions
How is a holiday let mortgage different from a standard BTL mortgage?
A holiday let mortgage is assessed on projected annual FHL income from a specialist letting agent or RICS valuer, not on a single AST tenancy. The income figure is typically higher per year than a long-term rental, supporting greater borrowing. Specialist FHL lenders only - mainstream BTL lenders do not understand the income methodology.
What areas work best for holiday let investment?
Coastal areas (Cornwall, Devon, Dorset, North Wales, Lake District), historic cities (Bath, Edinburgh, York), and rural leisure destinations consistently produce strong FHL income. The specific property and its proximity to attractions matters more than the broad region.
Can I use the property personally as well as letting it?
Yes - and HMRC's FHL rules allow personal use while maintaining FHL tax status, subject to the 210/105 day availability and letting requirements. Most FHL mortgage lenders also allow personal use with restrictions.
What LTV can I achieve on a FHL mortgage exit?
Most specialist FHL mortgage lenders advance to 70-75% of the property value. The income assessment methodology typically produces strong enough rental coverage to support these LTVs on well-located properties with good specification.
Can I buy a holiday let through a limited company?
Yes - FHL mortgages in limited company names are available from specialist lenders. The HMRC FHL tax rules apply differently in a company structure - professional tax advice is essential before deciding on personal name vs company ownership for FHL investment.
Explore related pages
BRRRR Property Finance
Recycle capital through the holiday let BRRRR cycle.
Holiday Let Mortgages
Specialist FHL mortgage lenders for the exit.
BMV Property Finance
Buy the holiday let property below market value.
Property Flip Finance
Refurbish and sell rather than hold.
Holiday Let Investment Guide
Complete guide to holiday let investment finance.
Buy-to-Let Mortgages
Standard BTL as an alternative exit.
Ready to finance your holiday let?
Send us the property, the location, and your refurbishment plans. We model the projected FHL income, arrange the bridging, and place the specialist FHL mortgage exit with lenders who understand the income model.