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Brokers see growing interest in holiday lets

Brokers see growing interest in holiday lets 1024 576 NGI Residential Mortgages

Criteria searches by brokers have revealed a growing interest in holiday lets among buy-to-let clients, according to the latest data from Knowledge Bank.

It comes after numerous lenders have returned to the sector or started offering the products for the first time and overseas travel restrictions have prompted increased demand for UK holiday rentals.

Brokers have also been reporting an increase in enquiries from clients interested in short-term lets.

“Holiday lets” were in the top five most-searched-for criteria terms among buy-to-let brokers July data from Knowledge Bank reveals.

Other dominant searches suggest growing interest from novice landlords as the most-searched-for buy-to-let terms after “limited companies” were “first-time landlord” and “requirement to be a homeowner”.

Within the residential market, “Covid-19 temporary maximum loan-to-value restrictions” was top of brokers’ search list.

This was followed by “self-employed one year’s accounts”, which is frequently a highly-ranked term, but even more pertinent at a time when lenders have been looking more closely at the sustainability of borrowers’ income.

Another of the top-ranking searches was “Covid-19 furloughed workers”, further demonstrating the impact of the pandemic on lending criteria and borrowers’ prospects of securing a mortgage.

Also in the top five search terms was “Help to Buy equity loan scheme”, suggesting that borrowers have been looking to take advantage of the government help before it is dramatically scaled back next year.

Originally, building work on new homes would have needed to be finished by the end of December in order for buyers to qualify for support through the scheme, but the government confirmed on Friday that this deadline would be extended to February 28.

The deadline for the legal completion of the sale will remain the same – 31 March 2021.

Knowledge Bank lender relationship manager Matthew Corker says: “It is clear that the effects of Covid-19 are still hitting the mortgage market as they are likely to do for some time to come.

“More people are looking into holiday lets as the desire to travel abroad is falling among UK citizens while Covid-19 continues to impact the travel sector.

“I expect this to become a trend in the coming months as travel bans are enforced and air travel remains limited.

“Let’s not forget the stamp duty holiday will further encourage consumers to take the plunge. The beauty of holiday-lets is they also allow buyers themselves to benefit from a secondary location, something everyone in the UK likely wishes they had access to right now.

“Throughout June and July, we have seen indicators that the housing market is moving, and the stamp duty holiday is one of the sources that will provide the economy with the boost it needs.”

* Content Source – Mortgage Strategy.