The change in criteria applies to its entire holiday let range, which has both fixed and discounted rate options up to 80 per cent loan to value (LTV).
The available loan amount ranges from £75,000 to £1m. It has a minimum property value of £100,000 for residences in England and Wales.
Potential borrowers will be subject to an interest coverage ratio calculation against the known or expected letting value. It is set at 145 per cent rental coverage based on an initial pay rate plus two per cent or a minimum of 5.55 per cent, whichever is more.
So far, lenders have been hesitant to accept Airbnb, citing problems such as heightened volatility due to shorter rental periods, a lack of legal status compared to an assured shorthold tenancy (AST) and unpredictable demand making income harder to gauge.
However, some lenders are changing their attitudes due to the increased popularity of Airbnb and growing trend of staycations.
Suffolk Building Society’s head of intermediary relations, Charlotte Grimshaw, said: “The popularity of domestic holidays in the wake of the pandemic looks set to continue, as costs of holidays abroad increase, restrictions persist, and rules around isolation continually change, making travel abroad more hassle than it’s worth for many.
“This, coupled with the way lockdown has altered people’s lives, from welcoming new pets, to a better appreciation of the British countryside, all make holidaying in the UK appealing.”
She added that Airbnb was now a “trusted source of accommodation by all”, making it vitally important to holiday lets and therefore important to permit Airbnb landlords to apply for a new mortgage or remortgage with the mutual.
Grimshaw said: “We also understand that many holiday let landlords take many routes to market, advertising their properties on several sites at once to maximise their potential income. By making this change we are able to support this entrepreneurialism and help our landlord borrowers reach a wider customer base.”