Multi-Unit Holiday Lets
This is a style of holiday let accommodation where more than one property or dwelling is contained within the freehold title.
There are many variables on how this may look but a farmhouse with converted barns and outbuildings would be a good example of a multi-unit holiday let.
What is a multi-unit holiday let?
A multi unit holiday let will have three basic components:
- Multiple dwellings, which are all fully furnished
- Ownership of these is from one freehold title
- They are let out commercially as short term lets or holiday lets
The multi-unit part refers to the fact that there is more than one building on the title that is used for letting. It is possible for this to be a small purpose built block of flats or apartments.
This structure is popular with experienced landlords within buy to let and are often referred to as a Multi-Unit Freehold Block, or MUFB.
In our experience most of the short term rental properties that have multi-units are separate buildings that have either been constructed on the land or converted into a dwelling.
Barn conversions are a popular way of making use of an existing structure and these make excellent holiday lets due to their locations and characteristics.
Equally they could also be cottages or lodges that have been added at some point.
There’s no ‘typical’ multi-unit holiday let to look out for. They come in all shapes and sizes and this uniqueness adds to the charm and sets it apart from others.
If you really want to go full steam ahead then consider running a holiday park site. This would involve buying some land and then installing pods, lodges or static caravans as the accommodation. A holiday park commercial mortgage will get you started with funds to buy the land.
You may also come across the term mixed-use.
When a property is called mixed-use it means that part of the property is used for people to live in (or stay in) and part is used for commercial purposes. If this is the case then a mixed-use mortgage will be required, and a mixed use holiday let mortgage where holiday letting is the commercial part.
Not on the High Street!
The high street lenders can’t help every mortgage customer and they prefer the simple, low-risk ones.
If your situation is a bit different or needs a more personalised solution then our brokers can help.
Expert advice, for all situations.
Bridging Loans
The most flexible of secured loans and often misunderstood. Bridge loans can be used in so many different ways and can be arranged super fast.
Large Loans
High net worth mortgage brokers understand complex large loans and unique situations and can source bespoke deals from the right lenders.
Let to Buy
Let to buy combines a buy to let remortgage with a residential mortgage. Allowing you to move house while keeping your current home.
What finance is available?
The finance needed for these style of properties is mainly provided by commercial or specialist lenders who understand the short-term letting industry. It’s not something that a high street lender would want to lend against.
Unlike standard lenders, these specialists have flexible criteria and they will look at the overall picture of a borrower, their finances and the intended holiday let. Underwriting decisions will be done manually, with experienced staff (who have common sense and live in the real world).
There’s no real limit to the number of properties or units owned. The main lenders will be happy at 4-6 units and for larger estates there are specialist lenders and private banks.
How you intend letting or marketing the property will be relevant to the lender. Many owners will prefer to advertise and deal direct with guests while airbnb mortgages are also available.
Mortgages are available to:
- Individuals
- Partnerships
- Trusts
- Limited companies
- Special Purpose Vehicles (SPV)
LOAN TO VALUE
75% LTV is achievable with most lenders
FIRST TIME INVESTOR
Yes, mortgages are available to first time investors
AIRBNB
Financing that includes Airbnb usage is available
OWN USE
Own use permitted for upto 60 days per year
Getting the right advice
You probably already know what we are going to say here…
GET YOURSELF AN INDEPENDENT MORTGAGE BROKER
These types of mortgages and loans are not readily available from the high street or from comparison websites.
For the best outcome you should work with an independent mortgage broker, they will have access to over 100 lenders and many of these will be specialists.
The mortgages for multi-units are often a cross between a buy to let mortgage, a holiday let mortgage and a commercial mortgage. There’s no set type or size, if a lender is interested they will devise a loan to help you.
MAKE SURE THEY ARE EXPERIENCED
Arranging finance for a multi-unit holiday let is both rewarding and interesting. The properties are interesting and often have their own quirks and intricacies.
But the broker does need to have experience in this marketplace. So don’t be afraid to ask a few key questions at the first meeting or call.
