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Financing a house move with a possible hoilday let included???

(5 Posts)
TryingToJuggle Sun 20-Mar-16 12:34:15

Hi

After some advice. We are looking to move house and have a budget of approx £450k. We have seen a house which is on at £700k which has a big annex which we could let out as B+B rooms or a lovely holiday let to bring in an income.

Is this achievable? How would I go about trying to raise the finance that we would need for the rest of the purchase?

Pufflemum Sun 20-Mar-16 12:39:48

We almost purchased similar a year ago, a big house with three holiday cottages. High street lenders would not consider it. You need to go to an excellent broker and take advice. We got offered some good hybrid residential/ business mortgages but they were very expensive to set up, around 1.5% of the loan amount I think. In the end it was so complicated we didn't do it. There is a good forum called lay that.com which will help you.

Good luck.

Pufflemum Sun 20-Mar-16 12:40:40

Sorry that should be www.laymyhat.com

TryingToJuggle Sun 20-Mar-16 12:42:11

Hi Puffle Thank you. That site doesn't seem to work. Do you have a link?

Needmoresleep Sun 20-Mar-16 17:27:29

I am not convinced there is any pot of gold at the end of a holilday let rainbow:

1. For most places the season is short. You get good rent during the school summer holidays but rent at other times, even if there is a market, is low.
2. It is hard work. People expect hotel type quality. I end up losing about 40% through agency fees, linen hire, and clean. Better that than do it myself. It is hard work.
3. Set up costs are high. You need to pay council tax, all utilities, wifi, and have the property fully equipped. People do weird things, and maintenance costs are higher than a normal rental.
4. There is increasing competitiion from AirBnB
5. There are tax implications, some favourable including CGT and IHT, as holiday letting is seen a business in a way that BTL is not. However there are strict availability and letting requirements, which you need to meet to make the best of tax breaks. (This may be why you can't get a domestic mortgage.)

One thing that can work is if you are near a University. Let to holiday makers in the summer, and students in the winter.

It works for me but I am in a fairly large seaside town where there is a year round economy so short lets from contractors etc, plus I get grandparents renting during winter school holidays when they come down to help with child care etc. I use the property to visit my elderly mother and am therefore not looking to cover much more than my running costs. Otherwise, and unless you love hosting, forget it.

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