A guide to holiday let mortgages for UK expats

6 days ago2 min read

Owning a UK property as an investment asset or a personal holiday retreat is an appealing prospect for many British expats. With the UK’s thriving short-term rental market, securing a mortgage for a holiday let property can provide both financial returns and a convenient base for visits home (writes Howard Reuben, Principal, HCH Financial Services).

If you're an expat considering investing in a UK holiday let, understanding the mortgage process is crucial. As experienced holiday let mortgage brokers, we've compiled essential insights, tips, and eligibility criteria to help you navigate the process successfully.

Can expats get a UK holiday let mortgage?

Yes! Many UK holiday let mortgage lenders offer products specifically for expats. These mortgages cover a range of property types, from cottages and apartments to grand estates, and even castles.

Key eligibility criteria for expat holiday let mortgages

To secure a holiday let mortgage as an expat, you’ll generally need to meet several key requirements:

UK bank account: essential for managing mortgage payments.
UK correspondence address: lenders will conduct a credit search linked to this address.
Minimum income threshold: At least £25,000 in employed income. Self-employed applicants are typically only considered if their business is based in the UK.

How much can you borrow?

Loan amounts: up to £3 million.
Loan-to-value (LTV) ratio: maximum of 75%.
Affordability assessment: based on average rental income across low, mid, and high seasons. For Airbnb-style rentals, lenders often require a letter from a lettings agent (not an Airbnb statement) to verify anticipated rental income.

What types of properties are accepted?

Properties: new and established holiday lets, including properties listed on Airbnb and similar platforms.
Personal use: up to 90 days per year.
HMRC definition: property must qualify as a Furnished Holiday Let under HMRC guidelines.
Location: typically within easy reach of a major holiday town.

What types of properties are not accepted?

Holiday parks and bed and breakfasts.
Temporary or moveable properties.
Properties with restrictive covenants.

Where can expats reside to be eligible?

Lenders accept expats residing in most countries, including:

Middle East: UAE, Jordan, Qatar.
North America & Caribbean: USA, Canada, Bahamas, Barbados.
Asia-Pacific: Australia, New Zealand, Japan, Singapore.
Africa: South Africa, Mauritius.
Note: Applicants residing in UN-sanctioned or war-torn regions, and some parts of Europe and Hong Kong, may face restrictions.

Why choose a UK holiday let mortgage as an expat?

Investing in a UK holiday let offers multiple benefits:

Attractive rental yields.
Personal holiday retreat.
Potential for value appreciation.

However, navigating the mortgage landscape as an expat can be complex due to varying lender requirements and international financial considerations.

How we can help

As expert holiday let mortgage advisers, we simplify the mortgage process for expats. Our team offers tailored advice to help you secure the best mortgage deals, ensuring your holiday let investment is both profitable and stress-free.