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Holiday home or buy-to-let?

The pros and cons of the UK holiday let market from Together

Following widespread reports of UK consumers desperate for a holiday busily booking up accommodation at multiple sites, with a view to cancelling all unnecessary options at the 11th hour to guarantee their spot this summer – Chris Baguley, commercial Managing Director at Together has shared a few helpful tips when it comes to the UK holiday let market.


While restrictions around international travel remains uncertain, demand for UK staycations has experienced a meteoric rise, as thousands of holidaymakers zone in on the UK’s hotspots resulting in lots of natural beauty spots and coastal towns becoming oversubscribed for those wanting to make the most of the British summer holidays.

The UK’s holiday let market has also enjoyed a welcome boost over the past 6 months - with holiday let mortgage options for borrowers rising by 45%[2] - as more consumers discover the often affordable and highly enjoyable alternative to potential quarantine periods: a UK holiday home investment.


Even before the pandemic, we were seeing dramatic changes across the buy-to-let landscape with holiday lets steadily increasing in appeal – more so than for traditional buy-to-let properties – as they allow people to tap into the UK’s many tourism opportunities.”

Chris Baguley, commercial Managing Director at Together

For anyone considering a holiday let investment this year, Chris Baguley at specialist lender Together has shared a few pros and cons for staycationers:

1. Opportunity for higher rental yields

For landlords, holiday lets had already begun to grow in popularity well before Coronavirus, mainly due to the significant tax advantages as they are classed by HMRC as a business (rather than an investment). Combined with the potential for bigger profit margins and a much higher return per-night, now could be a great time to invest in a furnished holiday cottage and rent it out to paying customers on short-term lets.

2. Technology does the heavy-lifting

With so much demand for staycation destinations this year, landlords and second homeowners (should they wish to let out their property) can relax knowing that this process has become much simpler to manage online. With the likes of Airbnb and other options helping you get your property listed, you can get yourself set up and ready to welcome your guests with minimal hassle.

3. Getting a mortgage
For those considering a second home, there may some hurdles to overcome if trying to obtain a mortgage via 
traditional banks or high street lenders due to the increasingly tough affordability criteria.


For example, lenders will first need to see strong evidence that you will be able to keep up with the mortgage repayments on your second home – especially if you have a mortgage for your current property. Lenders could also refuse an application depending on the location of your holiday home – especially if you’re buying a place in an area that has risk of flooding – like in the Lake District.

Instead, to support consumers seeking holiday let properties, Together can provide holiday let finance, available on first and second charge loans, for investors looking to purchase a property or remortgage, with a maximum loan-to- value of 65%.

4. Costs involved

Unlike standard buy-to-lets, holiday lets have to be managed for regular visitors and therefore, there may be higher costs, such as paying for a weekly cleaner or managing agents’ fees, so these are things that consumers should consider before making any rushed decisions.

In addition, if you open your home to paying guests you’ll need to be prepared for potential damages and repairs being needed more regularly – especially after weeks of wear and tear following the summer holiday season.


Property investor, Mathew Rees (aged 41 years old), paid £1.65million for the former home of renowned maritime artist Charles Pears, called Polvarth Studio in St Mawes, Cornwall.

He was able to do this after securing a bridging loan from specialist lender Together, and will rent it out as a luxury holiday let following a refurbishment.

Mr Rees, said: “It has incredible views across the bay at St Mawes and it’s unsurprising it inspired so many fantastic artworks. The holiday let is one of the few properties in the area that has its own private quay leading directly into the bay and, following some minor refurbishments and improvements, I’m ready to welcome families and guests to enjoy the fabulous property this summer.”

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About Together

Together has been delivering specialist secured lending for more than 46 years, using its wealth of expertise and industry knowledge to consider individual circumstances to find a way to help its customers. All applications are considered on their merits and the commercial product range includes short-term finance, buy-to-let, commercial and semi-commercial mortgages and loans, auction finance and development funding throughout mainland UK.

Based in Cheadle, Cheshire, the company employs more than 530 colleagues and has a loan book of more than £4 billion. For more information go to https://togethermoney.com/

Your home may be at risk if you do not keep up repayments on a mortgage or other loan secured on it.

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