Easy route to holiday homes B2L launched

Scarborough has launched the country’s first completely self-funding holiday buy-to-let mortgage.

The base rate tracker and fixed rate products offer interest rates from 5.39% and applicants’ eligibility will be judged by the property’s potential rental income rather than their personal income.

The aim of this offering is to give potential investors an easier route to owning holiday homes, which tend to be excluded from standard buy-to-let mortgage schemes.

Customers put down a deposit of 25%. But so long as they earn more than 25,000 per year in regular employment and can prove their intended purchase has the potential to generate annual rent worth at least 150% of the mortgage repayments they should qualify.

Should rental income fall short, Scarborough will take account of the applicant’s personal income.

Tony Burdin, head of retail strategy, says: “Buying property to let has become increasingly popular in recent years. Low interest rates have made mortgages more affordable and rental income has been seen as an attractive alternative investment to bolster pension provisions.

“Holiday lets are no exception to this and, with the additional benefit of the valuable tax advantages holiday lets provide over buy-to-let properties, these mortgages offer an exciting proposition for would-be landlords.

“We believe these deals are the first self-funding mortgages in the country specifically for holiday homes.

“This is a welcome development for people who may not have sufficient personal income to support significant loans on their main and second homes.

“Given our headquarters’ location in Scarborough, one of the country’s biggest coastal tourist hotspots, it is apt we should lead the way by offering a mortgage of this kind.”