Leeds Building Society said that its new dedicated range of Holiday Let products is a result of demand which has increased significantly over the last five years.
Between 2008 and 2011, the use of UK holiday cottages doubled and it continues to rise. Indeed, according to Travelodge, two thirds of Britons will take a summer break in the UK this year, which is an increase of 41% compared to 2012.
‘Holiday let provides an appealing alternative to buy to let with attractive rental returns and a second home rolled in to one,’ said Kim Rebecchi, sales and marketing director at Leeds Building Society.
‘We estimate that up to two thirds of existing holiday let landlords would refinance their current deal in order to reduce their costs and maximise their income, but choice is limited. I am delighted that we are able to support the UK holiday market by launching a dedicated product range and remove the uncertainty for new and existing holiday let landlords,’ she added.
Whilst holiday homes in coastal resorts and national parks may be expensive, careful selection can generate attractive financial returns with consistent rental demand throughout the year. For example, a two bedroom holiday cottage in Keswick let for 39 out of 52 weeks per year can attract rent of around £350 per week, rising to £650 in peak periods. Assuming an average rent of £400 per week, around £15,000 annual rental income is generated, significantly greater than a comparable two bedroom residential buy to let property.
‘According to the Holiday Lettings Insight Report, holiday rentals generated in excess of £540 million in income in 2011. However, we know that funding for prospective holiday home landlords remains scarce, with only a handful of regional lenders in the market,’ explained Rebecchi.
‘As a result, Leeds Building Society has introduced a dedicated range of holiday let mortgages, priced alongside our buy to let range, to offer greater access to this type of lending and we believe this will create more opportunity and capacity. Furthermore, our team of mortgage underwriters understand this market and we've made our most popular buy to let fixed rate products available, so holiday let landlords can secure a competitive deal over a timeframe that best suits their needs,’ she said.
Virgin Money has announced a number of changes across its residential and buy to let mortgage range. The updated range will be available to purchase and remortgage customers from today (Tuesday 23 July).
‘We remain committed to offering attractive products and putting our customers at the heart of all we do. ‘These improvements to our mortgage range, which will support borrowers in a range of situations from the existing borrower remortgaging their property, to someone buying a house with a smaller deposit, and landlords buying a property to rent out,’ said Peter Rogerson, commercial director for mortgages and savings at Virgin Money.
Meanwhile the Yorkshire Building Society group said it has offered more than 1,600 best buy products in the first half of 2013. ‘As the second largest building society in the UK, we are very mindful of the fact that we were founded to enable people to buy their own homes,’ said Chris Smith, Yorkshire Building Society Group direct mortgages manager.
‘We are sticking to our principles as a mutual and focusing on long term good value and encouraging members to manage their finances sustainably and plan for their future. Our range of products is among the widest in the market which means borrowers can choose the mortgage that is exactly right for their needs,’ he explained.
Santander has just launched its range of Help to Buy Equity Loan mortgages via its intermediary channel. The new range of mortgages, available as part of the UK government's Help to Buy Equity Loan scheme on new build properties, aims to provide a choice of affordable housing options for customers and are designed to help borrowers trying to get their first step on the property ladder or move up the property ladder.
The Help to Buy range offers competitive fixed and tracker rates starting from 3.29%, with a minimum deposit of 5% of the purchase price and no booking fees on new build properties.
‘Santander is delighted to be joining the government's Help to Buy Equity Loan scheme, which we believe will play an important role in helping both first time buyers and home movers looking to buy new build properties,’ said Phil Cliff, director of Santander Mortgages.
‘Our new Help to Buy range offers competitively priced products with no upfront booking fees, extending the affordable housing options we can offer to customers who have a deposit from 5% where they can also choose from our range of NewBuy and Shared Ownership exclusive mortgages,’ he pointed out.
‘Plus any customer who pays their monthly mortgage direct debit payment from their Santander 123 Current Account will receive 1% cash back on maximum monthly mortgage payments of £1,000. This, coupled with our Homebuyer Solution, sets our mortgage products apart from all other UK mortgage lenders,’ he added.
