Mortgage Insights: holiday home mortgages?

So, as you know, The Belfast Property Blog is fast becoming the one-stop shop for all property-related advice in Belfast. Every week my inbox is full of queries, from experienced landlords and portfolio investors, to the aspiring buy-to-let purchasers looking for advice.

I love answering these queries, but there are areas where I recognise more specialist expertise is required, which is why we're in the process of bringing on board some very exciting property and property-related experts.

The first of these you will recognise from his excellent guest post earlier this year, and I'm happy to announce you will be hearing a lot more from our new resident mortgage expert at The Belfast Property Blog, Neil Conlon.

He is not the only specialist advisor to be joining the editorial ranks, but I will keep you in suspense about that for just a little longer!

For now, let's look at the mortgage query he helped us out with this week - a reader of the blog got in touch to ask about mortgage options for a property which he wanted to buy for short-term rentals.

He was having trouble finding a bank that was willing to offer a holiday home type mortgage and asked "Are you aware of any banks that will offer this?"

I passed him into the capable hands of Neil who advises:

"Natwest offer 'second home purchases' at residential rates of up to 5% - affordability will be assessed on the basis of you being able to afford your current residential mortgage (your home house) and the new 'second' home purchase. 

"You should be ready to have your finances scrutinised, but with a little help and good advice, we can prepare you for that. 

"The first thing you need to remember is that the property as a second home / additional property / buy-to-let instantly qualifies for stamp duty if it is priced above £40,000 (which is highly likely unless you're looking for a serious renovation project).

"Nat West will 'stress test' your finances to calculate the likeliness of you being able to maintain payments on both your properties on top of your other financial commitments.

"You'll need to demonstrate that one of the properties is indeed your main home - this is usually fairly straightforward if you've lived there for a half decent amount of time.

"All that's left to do is to research whether the area has demand for this type of rental and what kind of income you can expect in order to calculate your return on investment or yield."

And that leads neatly back to me! You can, of course, contact me directly with any questions to info@thebelfastpropertyblog.com; you can check out my Area Profiles to learn more about demand and average rental incomes in different parts of Belfast, and you can use my handy Yield Calculator to see just how lucrative that new holiday home investment might be!

Any questions relating directly to mortgages, simply label these 'Mortgage Insights' and send to the same address!