Part-time landlords purchase first holiday let in Cornwall
The clients: A couple looking to make their first holiday let purchase. One applicant is a HR manager, the other a homemaker who also receives a disability allowance.
The property: A three-bed terraced house located in one of Cornwall’s tourist hotspots. The couple were hoping to purchase the property and rent it out to holiday makers.
The finance: The couple had managed to save a deposit of £78,000 and were looking to borrow £180,000 (70% LTV). Our challenge was to find a lender that accepts:
- Applicants with no holiday letting experience – It’s easier to get finance if you have experience in this sector.
- A new holiday let business – Established holiday lets pose less risk as they can be supported by trading accounts. Fewer lenders are interested in properties that are not already holiday lets.
We took the case to a particular building society which we know is willing to take a pragmatic approach and after some initial negotiations we obtained an agreement in principle and a mortgage product with no lender arrangement fees.
The application: We worked with the client to collate the necessary documentation and also helped them draw up a detailed business plan before submitting the application.
Before agreeing the deal, the lender then came back to us requiring more supporting information about the rental income over a 30—week period broken down into what could be realistically achieved during low, mid and high season . We obtained written confirmation of this breakdown from a local holiday letting agent and a formal mortgage offer was duly issued.
We then worked with the lender and the solicitors to get the deal over the line as quickly as possible. Just 10 weeks later our clients received the keys to their new holiday let.
Here are the details: