Principality will consider Holiday Homes on BuyToLet

The Principality Building Society will consider lending on holiday homes using their standard buy to let product range and criteria.

This little know niche which is unusually for lenders was brought to my attention by one of our consultants James Scoular after helping a Property118 reader secure an offer letter on her holiday home. Sure enough after investigation I found it hidden away in their three page mortgage lending criteria guide.

The guide states that “buy to let products are available for holiday lets with supporting evidence of achievable income”. In practice they require a standard valuation survey to be carried out on a buy to let basis and have a local letting agent confirm the likely annual rental income. If the two figures are different this can then be supported further by a reputable holiday company such as Hoseasons.

The Principality will only allow one holiday let per borrower to be financed by themselves although you can own more within your portfolio.

Other standard buy to let criteria are as follows:

• Minimum income required £20,000 for sole applicants or £30,000 for joint
• Minimum loan amount £25,000 maximum £500,000
• Maximum of 5 properties including the application to be owned by the borrower
• Rental stress testing is calculated at 125% of the monthly interest payment or 5.99% whichever is the higher

Principality 5.49% 2 year Bank Base Rate Tracker until 30/09/14 (70% LTV)

Early repayment Charges – 4% of the amount repaid until 30/09/14

Fees – Arrangement a flat £999 and Booking £99

Incentives – mortgage valuation and a remortgage transfer service included

Overall cost for comparison – 5.3% APR

Cost over 2 years interest only for a £100,000 loan not including incentives = £12187.69

Principality 5.99% 2 year Bank Base Rate Tracker until 30/09/14 (75% LTV)

Early repayment Charges – 4% of the amount repaid until 30/09/14

Fees – Arrangement a flat £999 and Booking £99

Incentives – mortgage valuation and a remortgage transfer service included

Overall cost for comparison – 5.4% APR

Cost over 2 years interest only for a £100,000 loan not including incentives = £13197.68

– These products both allow you to borrow 160.26 times the monthly rental income

To discuss a specific Buy to Let deal you can call us on 01603 489118 or email [email protected]

If you would like to add your own requirements and search for the most popular available Buy to Let products please click here