New buy-to-let mortgage for holiday homes launched

A self-funding holiday buy-to-let mortgage, a first for the UK, has been put on the market by Scarborough Building Society.

The possible rental income from the property will be the main factor in deciding if a person is eligible for the mortgage rather than his/her annual wages.

Therefore it will be easier to purchase a holiday home, as they are generally not part of standard buy-to-let mortgage schemes.

Tony Burdin, from Scarborough Building Society's, said that low interest rates and using rental income as an alternative to using pension funds were the key reasons for the increasing popularity of buying property to let.

He continued: "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 new mortgages offer an exciting proposition for would-be landlords.

"We believe these products are the first ever self-funding mortgages in the UK specifically for holiday homes. This is a welcome development for people who may not have sufficient personal income to support significant loans on both their main and second homes."

To qualify for the mortgage, applicants must prove the property they wish to buy has the potential to produce annual rent worth at least 150 per cent of the mortgage repayments and they must receive an annual income of over £25,000 per year in regular employment.