Holiday Let Mortgages: How They Work in 2026

A holiday let mortgage is a buy-to-let mortgage that allows short-term furnished lettings. Lenders size it on projected holiday income, usually from a letting agent’s forecast, rather than a monthly rent.

A holiday let is a furnished property let for short stays, through sites such as Airbnb, Booking.com or a local holiday letting agency. A standard buy-to-let mortgage usually only allows longer tenancies, so short-term letting needs a lender that allows it. Since April 2025 the tax rules have changed too, so the numbers need a fresh look.

For how buy-to-let lending works more widely, see our complete buy-to-let mortgage guide.

Can you get a mortgage for a holiday let?

Yes, from specialist buy-to-let lenders. Expect to put down 25% to 30% and to show a letting agent’s income projection for the property. Lenders test that income at a stressed rate, often with a bigger margin than a normal buy-to-let. Many want a minimum personal income, and some prefer landlord experience.

How do lenders assess a holiday let?

Instead of a monthly rent, the lender uses projected holiday income, normally from a letting agent’s forecast of low, mid and high season weekly rates. Many lenders take an average across the seasons, then apply their own rental cover test at a stressed rate, often with a higher margin than for standard buy-to-let to allow for empty weeks.

	Typical holiday let requirements
Deposit	Usually 25% to 30%
Income evidence	A holiday letting agent’s projection, sometimes trading figures for an existing let
Personal income	Many lenders want a minimum, and some want landlord experience
Personal use	Often allowed for a limited number of weeks a year
Property	Must be suitable and in a recognised holiday area

Which lenders accept holiday lets? (checked 17 October 2026)

Lender (source)	Holiday let policy
Leeds	Holiday let range, up to 70% LTV for first-time landlords
Landbay	Accepted, up to 5 properties, not for first-time landlords
Vida	Holiday buy-to-let range
The Mortgage Works	Not accepted
Santander	Not accepted
Fleet	Not accepted
Accord	Not accepted
Skipton	Not accepted

Many mainstream buy-to-let lenders exclude holiday lets, so this is specialist territory. These are summaries of each lender’s published broker criteria, checked on 17 October 2026. Criteria change often and meeting a rule does not guarantee approval.

Which situations do lenders see most?

These are illustrative situations, not Option Finance client outcomes.

What changed for holiday let tax in April 2025?

Until April 2025, qualifying furnished holiday lets had their own tax regime. It has now been abolished, as set out in HMRC’s policy paper on the abolition of the furnished holiday lettings tax regime. Holiday let income is now taxed like other property income:

• Mortgage interest: individual owners now get a basic-rate tax credit instead of deducting it in full.
• Capital allowances: no longer available on new spending on furniture and fittings.
• Capital Gains Tax: Business Asset Disposal Relief and some other reliefs are no longer available on sale.
• Pension contributions: holiday let profits no longer count as relevant earnings.

From April 2027, property income in England, Wales and Northern Ireland will be taxed at 22%, 42% and 47%. GOV.UK explains how to report it in its guide to paying tax on rental income. Many owners have reviewed whether to keep, sell or switch to long-term letting. See our buy-to-let tax guide and take advice from a tax adviser.

Does a holiday let pay business rates or council tax?

In England, a holiday let is assessed for business rates instead of council tax if it was available to let for at least 140 nights in the last 12 months, actually let for at least 70 nights, and will be available for at least 140 nights in the next 12 months. Otherwise it pays council tax, and many councils now charge a second homes premium of up to 100%. Wales has higher thresholds and its own premiums, and Scotland requires short-term let licences. GOV.UK sets out the tests for self-catering and holiday let accommodation.

Should you choose a holiday let or a standard buy-to-let?

	Holiday let	Standard buy-to-let
Income	Higher potential, more seasonal	Steady, lower
Work and costs	Cleaning, changeovers, marketing, agent fees often 15% to 25%	Lower running costs
Personal use	Possible within limits	Not allowed
Lenders	Fewer, specialist	Wide choice
Regulation	Local licensing and possible visitor levies	Renters’ Rights Act obligations

What should you check before you buy?

• The lease and title. Some leases and restrictive covenants ban short lets. You can get the title register from HM Land Registry.
• Local rules, including licensing, council tax premiums and any visitor levy.
• Realistic occupancy. Ask the agent for figures from similar properties, not just peak weeks.
• Running costs. Cleaning, laundry, insurance, utilities and agent fees all come out before profit.
• Your exit. Know whether the property would also work as a long let if holiday demand drops.

Can you buy a holiday let through a limited company?

Some owners buy holiday lets through a limited company, where mortgage interest is a deductible cost. Fewer lenders offer limited company holiday let mortgages, and the choice is narrower again for a new company. See our limited company buy-to-let guide.

Frequently asked questions

Speak to Option Finance about your holiday let

Send us the property details and the agent’s forecast. We will tell you straight what lenders are likely to lend, how much personal use they allow and whether the numbers still stack up after the tax changes.

Book a free initial consultation using the enquiry form below. See our buy-to-let mortgage advice, our buy-to-let remortgage guide and our guide to bed and breakfast and guest house mortgages.