It said the popularity of domestic holidays and the high potential returns were attracting traditional landlords to this specialist sector.
Vernon added it has also seen increased enquiries from holiday homeowners looking to remortgage or expand their portfolio.
Discount rate deals
The lender is now offering separate holiday let mortgages for individual landlords and limited company landlords.
Both mortgages are available at up to 75 per cent loan to value (LTV), come with a £999 fee and are allow loans from £100,000 to £1m, providing the property is worth at least £300,000.
For individual landlords there is a three-year discounted rate deal, currently at 2.9 per cent.
For limited company borrowers it is a two-year discounted rate, currently at 3.05 per cent.
Tom Gurrie, intermediary sales manager at Vernon BS, said: “Holiday lets were already a growing sector for us but, in recent months, we’ve seen a great deal of interest from landlords.
“They’re looking to purchase property in coastal locations, big cities and other tourist hotspots to take advantage of the growing demand for staycations.”