Why it’s not standard BTL
Buy-to-let mortgages usually assume an assured shorthold tenancy and a monthly rent. Holiday lets are short stays, platforms, cleaning costs and void weeks — so affordability is stress-tested differently. Some lenders won’t touch them at all; others specialise in them.
How affordability usually works
Expect lenders to look at gross letting income across the year — sometimes using an average from a letting agent or platform data — then apply a haircut and an interest cover ratio (ICR) at a stressed rate. They’re asking: if rates rise and bookings dip, does the property still wash its face?
Personal income often matters too, especially if the property is new to letting or has a thin track record. You may need to show you can cover voids from earned income or savings.
What they assess differently
Location and planning: Is the property in an area where short lets are allowed — and insurable? Management: Self-managed vs agent — lenders may want to see professional oversight. Experience: First holiday let vs an existing portfolio changes the risk picture. Tax: Furnished holiday let rules and what counts as trading income — you’ll need your accountant aligned before you apply.
Deposits and rates
Loan-to-value limits are often stricter than residential or vanilla BTL. Fees and rates vary widely — shopping the specialist end of the market matters more than grabbing the first comparison-site result.
When to talk to an adviser
If you’re converting a second home, buying a coastal bolt-hole, or building a portfolio of short-let properties, get advice before you offer. The right lender order saves aborted valuations and lost fees.
This guide is general information, not personal advice. Holiday let rules and lender criteria change — speak to us for a view on your numbers.