Suffolk Building Society has updated its holiday let mortgage criteria and will now consider applications from landlords who intend to market and let their properties using Airbnb.
The change applies to all of the Society’s mainstream holiday let range which offers both a fixed and discounted rate up to 80% LTV with a minimum loan of £75,000, a maximum loan of £1m, and a minimum property value of £100,000 for properties in England and Wales.
In line with existing holiday let criteria, the Society will undertake a rental coverage assessment / Interest Coverage Ratio (ICR) calculation against the known or anticipated letting value. Intermediaries and landlords should note that the known weekly rental income (or anticipated revenue during low, medium, and high season) will need to be provided by an independent lettings agent, rather than Airbnb. The annual rental must provide a minimum of 145% rental coverage based on the initial pay rate +2% or a minimum of 5.5% (whichever is the greater).
Landlords wishing to market their properties via Airbnb will be subject to the Society’s existing holiday let lending criteria.
Owners may occupy the mortgaged holiday let property for personal use for up to 60 days per year.
Charlotte Grimshaw, head of intermediary relations, said: “The popularity of domestic holidays in the wake of the pandemic looks set to continue, as costs of holidays abroad increase, restrictions persist, and rules around isolation continually change, making travel abroad more hassle than it’s worth for many. This, coupled with the way lockdown has altered people’s lives, from welcoming new pets, to a better appreciation of the British countryside, all make holidaying in the UK appealing.
“Airbnb was once the domain of digitally-savvy younger generations, but it is now a trusted source of accommodation by all, whether that be to discover a luxury home for a family holiday or a property more suited to a business trip and everything else in between. Therefore, Airbnb is increasingly important for holiday let landlords too and we want to support this market by allowing Airbnb landlords to apply for a new mortgage or remortgage with us.
“We also understand that many holiday let landlords take many routes to market, advertising their properties on several sites at once to maximise their potential income. By making this change we are able to support this entrepreneurialism and help our landlord borrowers reach a wider customer base.”
