Neil Soundy Financial Services - AIRBNB and Short-Term Let Mortgages - Personal - Limited Company - SPV

AIRBNB and Short-Term Let Mortgages - Personal - Limited Company - SPV

The Buy-to-Let market is changing. Personal Buy-to-Lets are becoming less viable due to the introduction of harsher taxation from April 2017.

The majority of the mortgages we arrange now are via a Limited Company or SPV (read our blog - Special Purpose Vehicle / SPV Mortgages For Landlords).

Landlords are now letting their properties via AIRBNB and short-term lets because of the higher rental returns they offer. Short-term lets allow landlords to rent out their properties for short periods ranging from a few days to six months. They provide more than accommodation for tourists but cater for short-term rentals such as corporate lets, people who want to research an area before committing to buying and homeowners looking for alternate accommodation while work is being done on their property.

With the rise of AIRBNB properties, there are currently eight lenders offering AIRBNB/short-term let Mortgages:

  • Paragon
  • Principality Building Society
  • Foundation Home Loans
  • Axis Bank
  • Castle Trust
  • Market Harborough
  • Furness Building Society
  • Metro Bank
  • Tipton & Coseley
  • Monmouthshire Building Society

However, At this point in time, our favourite AIRBNB lenders are Principality Building Society, Foundation Home Loans and Monmouthshire Building Society. We’ve highlighted the key points of each below.

Paragon

  • Personal
  • Limited Company (SPV)
  • Loan to value 70% (can ad lenders arrangement fee)
  • Purchase
  • Remortgage
  • Interest rates higher as a specialist lender
  • Lenders arrangement fee higher as a specialist lender
  • Rental based coverage on projected standard assured tenancy agreement or proven two years holiday rental income
  • No need for AST
  • Minimum £25,000 personal income
  • Deposit can be funded by an inter-company loan from Trading Company to SPV/Limited Company

Principality Building Society

  • Personal name only
  • Loan to vale 75% (can add lenders arrangement fee)
  • Purchase
  • Remortgage (free valuation & free legal option)
  • Standard personal buy-to-let interest rates
  • Standard personal buy-to-let arrangement fees
  • Rental coverage based on projected AIRBNB income
  • No need for AST
  • Minimum personal income of £20,000 or £30,000 combined joint
  • Will only lend on 1 property

Foundation Home Loans

  • Personal
  • Limited Company (SPV)
  • Loan to value 75% (can add lenders arrangement fee)
  • Purchase
  • Remortgage (no current incentives)
  • Interest rates higher as a specialist lender
  • Lenders arrangement fee higher as a specialist lender
  • Rental coverage based on projected standard assured tenancy agreement
  • No need for AST
  • No minimum personal income
  • Max total borrowing with Foundation £3,000,000

Monmouthshire Building Society

  • Personal name only
  • Loan to vale 75% (can add lenders arrangement fee)
  • Purchase
  • Remortgage (free valuation & £250 cash back)
  • Standard personal buy-to-let interest rates
  • Standard personal buy-to-let arrangement fees
  • Rental coverage based on projected AIRBNB/Short-let income
  • No need for AST
  • Minimum personal income of £25,000
  • Will lend on three properties

Market Harborough Building Society, Tipton & Coseley and Furness Building Society

The drawback of these lenders is that instead of treating the purchase/remortgage as a self-funding business, you have to demonstrate overall affordability taking into account existing residential and buy-to-let mortgages.

Castle Trust & Axis Bank

Castle Trust will look at unusual and complex situations but the interest rates charged reflect this.

Axis Bank will lend on AIRBNB but require three years experience and that you already own three buy-to-lets. As Axis Bank is a specialist lender their interest rates and lender fees are higher than a personal buy-to-let.

Residential mortgages

If you have an existing residential mortgage the vast majority of lenders will not let you let out your property on an AIRBNB basis even for one weekend.

The lenders would treat this as a breach of your mortgage conditions and have the right to enforce sanctions.

Metro Bank takes a flexible view and will allow up to ninety days a year letting without breaking the conditions of your mortgage offer.

If you intend to let out your property via AIRBNB, you should check that your home insurance policy covers you for letting.

Solicitor and Accountant Advice

As this lending is more specialist we recommend you speak to a solicitor and accountant before proceeding. If you do not have your own solicitor or account or feel that they do not have the specialist knowledge, we can recommend one for you. They will happily discuss over the phone your options and the implications of buying via an SPV/Ltd Co.

Why Use Neil Soundy Financial Services For Your Mortgage Advice?

  • We are experts in AIRBNB and SPV/Ltd Co lending.
  • Your initial consultation is free with no obligation.

Check out our client reviews

How Much Will It Cost Me For Your Advice?

A fee of £345 is payable on completion of the mortgage and Neil Soundy Financial Services Ltd will keep the commission received from the lender for arranging the mortgage.


Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.

We do not give or imply legal or taxation advice. We recommend you contact a solicitor or account for advice in these areas

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

Tags

  • news
  • Letting
  • AIRBNB

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