The number of buy-to-let mortgages allowing holiday let has gradually increased over the past two years, Moneyfacts analysis shows.
There are now 445 products available, up from 354 in August 2022.
Landlords currently have access to a typical interest rate of 6.20%, while mortgages come from 34 different lenders, most of which are building societies.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “The buy-to-let market has undergone its fair share of upheaval over the past few years, with rising interest rates and tax perks quashed.
“However, a small part of this market has flourished over the past couple of years, with the availability of holiday let deals rising.
“There has also been an encouraging increase in the number of lenders prepared to cater to these types of landlords.
“There are over 400 deals for consumers to choose from and the majority of lenders that currently operate within this space are building societies.”
Furnished Holiday Lets regime
From April 2025 the Furnished Holiday Lets regime will be abolished, which currently allows landlords to deduct the full cost of mortgage interest from rental income.
Springall added: “These changes will no doubt come as a blow to both existing and prospective landlords, but the demand and profitability of a holiday let could still be worth weighing up.
“It would be wise for new investors to do their research and pick a property to let with their head, not their heart, and getting advice from a listings service is also wise to explore seasonal dips.
“Holidaymakers may struggle to save enough cash to cover the price of a holiday abroad or have been put off altogether by last minute flight cancellations.
“A break away in the UK could then be a safer and more affordable alternative, so holiday lets could be a great option.
“However, costly pitfalls might also arise, so holidaymakers must take time to do their research into the location, time of year, local events and the length of the break to ensure their ideal break away stays within their budget.”
