In 2025, holiday let ownership remains a popular mix of lifestyle and income investment. But it’s not as simple as buying a second home by the sea and renting it out on Airbnb. Regulatory changes, lender caution, and tighter affordability models have changed the landscape—making expert advice more important than ever.

Here’s what you need to know about getting a mortgage on a holiday let in 2025, and how to make your case stand out.

Lender Criteria for Holiday Let Mortgages in 2025

Holiday let mortgages are not the same as second home or buy-to-let products. They’re assessed on a specific set of criteria, which vary between lenders but generally include:

• Projected Holiday Let Income: Lenders usually require a letter from a holiday letting agency showing expected weekly rates and seasonal occupancy. Some will run their own valuation-based forecast.

• Personal Income Requirements: Many lenders now want to see a minimum earned income (£20k–£30k+), even if the property is self-sufficient.

• Minimum Deposit: Typically 25%–30% for holiday lets, but may rise to 35% for non-standard properties or remote locations.

• Letting Restrictions: Some lenders don’t allow Airbnb-style short lets. Others may require a minimum number of available letting weeks per year.

• Usage Rules: Most lenders require the property to be available to let for at least 210 days a year, and actually let for at least 105 of those.

Key Changes in 2025: What’s New?

Holiday let ownership has drawn increased attention from local councils and HMRC. Here’s what’s changed—or is changing soon:

• Planning Rules and Licences: Several local authorities in England and Wales now require planning permission or special licences for short-term letting. Scotland’s nationwide licensing regime is already in force.

• Tax Status and Council Tax: New rules have tightened eligibility for business rates. Owners must now prove active letting to avoid council tax—affecting cash flow.

• Affordability Models: Lenders have adjusted calculations to reflect more conservative income assumptions—especially in areas with seasonal tourism.

This means holiday let finance is now subject to deeper scrutiny—and fewer lenders are active in this space than in previous years.

Who’s Lending on Holiday Lets in 2025?

Holiday let mortgage lenders fall into three broad categories:

• Specialist Lenders: These include building societies and regional lenders who actively serve this market, such as Leeds Building Society, Principality, and Hodge.

• Private Banks: May offer bespoke terms for high-net-worth borrowers or those buying a portfolio of lifestyle assets.

• Limited Mainstream Options: A few mainstream lenders may offer products where the borrower has strong income and the property meets location and occupancy expectations.

Each lender has unique rules on:

• Maximum number of holiday lets
• Use of limited companies or SPVs
• Capital raising against existing holiday let value

Navigating these policies without guidance can result in declined applications or wasted time.

How to Strengthen Your Application

If you’re seeking approval for a holiday let mortgage in 2025, consider the following:

✅ Get a professional income forecast from a recognised letting agent—many lenders require this.

✅ Use an experienced broker—they can match you to lenders open to holiday lets in your chosen location.

✅ Demonstrate affordability both personally and from the property’s projected income.

✅ Clarify tax treatment—if you intend to use the property yourself for extended periods, it may not qualify as a holiday let.

✅ Plan for regulation—research whether your property falls within an area with licensing or planning restrictions.

Can You Use a Holiday Let Mortgage for Airbnb?

Yes, but not always. Some lenders allow Airbnb-style short lets, others don’t. The property must meet:

• Minimum quality standards
• Professional cleaning arrangements
• Calendar availability thresholds

Some lenders also restrict marketing platforms or require management via an agent.

Alternatives to Holiday Let Mortgages

If you’re struggling to get a holiday let mortgage, alternatives include:

• Buy-to-let mortgages (with full-time tenants—but these often prohibit short letting)
• Second home mortgages (but not usable for income-generating purposes)
• Bridging finance (if the property needs work or has non-standard construction)
• Private finance or family lending (if mainstream routes are blocked)

Each has its own eligibility and tax implications—so structuring matters.

Final Thoughts

Holiday let finance in 2025 is not a mass-market product. It sits in a regulatory grey zone between buy-to-let, second home ownership, and lifestyle investment. The key to success is choosing the right lender, packaging your case properly, and navigating local restrictions with care.

📞 Want Help Securing a Holiday Let Mortgage?

Speak to a Willow specialist who understands the nuances of holiday letting, planning rules, and lender appetite in 2025.