Scott and Helen own a few Buy to Lets which have worked very well for them. They often visit the Scottish Highlands and whilst on a recent holiday they realised that they love the beautiful scenery and the tranquillity so much that they would much sooner buy a holiday let there than add to their Buy to Let portfolio. It wasn’t all romance though as they are aware that holiday lets can be very lucrative. They also fancied the idea of being able to use it themselves.
On their return home to Preston they were disappointed to find that things were nowhere near as straight-forward as they had imagined. Firstly, there are fewer lenders offering holiday let mortgages, and secondly, most of those who do provide holiday let mortgages don’t allow personal use.
The other issue that they faced was that their income stream was relatively complex and failed to meet the requirements of most lenders operating in this specialist market.
Scott and Helen are directors of their own successful recruitment company. They take very little income from the business as they have modest outgoings which are largely covered by their buy to let income and the salaries from their business, which they keep at minimal levels. They do draw occasional dividends, but only on a ‘when needed’ basis.
Fortunately for Scott and Helen, their mortgage broker knew that Furness has the answer. Our holiday let mortgage product is designed with the borrower in mind as we understand that most people buying a holiday let will want to use it themselves. We therefore think it is sensible and more customer-focussed to allow up to 90 days a year for personal use and our borrowers really value this feature of their mortgage.
We also allow income to be assessed based on pre-tax profit as we recognise that some people don’t want to remove all the profit from their business. In fact, this is often something to be applauded rather than penalised.
The icing on the cake is that we lend in the Highlands. Not all lenders do.
We agreed a 75% LTV mortgage based on provision of 2 years’ accounts (which showed a consistent profit figure) together with an assessment of potential holiday rental income based on mid-season average figures.
Helen and Scott were delighted with the speedy way that their loan was processed and were in possession of their new holiday let in perfect time to get bookings in for the season ahead, as well as plan a few breaks themselves. Their summer adventure is about to begin!
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This case study is based on a real case but the names and some details have been changed and stock images have been used to protect confidentiality.