the security of long-term tenants. Lenders regard short-term tenancies as risky and often have mortgage conditions that prohibit landlords letting their property on a short-term basis.
In major cities and tourist destinations there is a high demand for short-term accommodation, so landlords should not have difficulty finding tenants. Some specialist lenders recognise this and have launched mortgages targeted at the short term, let market.
The weekly rent for a short term let will generally be considerably larger than the weekly rent from a long-term tenant, but there may be vacant periods with no income. There are tax advantages for holiday lets because they are regraded as businesses and not investments like long term buy to lets.
Administration costs are higher than long term lets, and the property requires cleaning in between tenancies.
The Residential Landlords Association revealed that 7% of landlords are migrating their properties from long-term to short-term lets. It is expected that the demand for short-term lets will grow.
Lending criteria for short term let property varies between lenders. A broker will advise landlords on the best loan deals to suit their situation.