Govt mulling holiday let tax changes as Leeds BS adds pair of mortgages

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  • 02/03/2021
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Govt mulling holiday let tax changes as Leeds BS adds pair of mortgages
The government will be responding “shortly” to its consultation on changes in taxation for holiday let properties as the market continues to generate interest from lenders and borrowers.

 

The statement came following a written question about whether it would be applying HMRC guidance on furnished holiday lets to the business rates criteria for self-catering accommodation.

This follows a consultation published by the Ministry of Housing Communities and Local Government (MHCLG) considering the issue in November 2018.

Minister for regional growth and local government Luke Hall said: “The government has consulted on possible changes to the rules under which holiday lets are assessed for business rates, including the possible addition of a letting criterion.

“We have been considering responses to that consultation, taking into account factors such as the impact of the pandemic on the tourism industry and consideration of owners of holiday properties in less frequently visited parts of the country.

“The government intends to provide an update on the consultation shortly.”

The consultation proposed strengthening the criteria under which furnished holiday lets could claim business rates classification instead of council tax, which tends to be more expensive.

 

Lenders responding

The holiday let market has generated great interest since the pandemic hit restricting holidays abroad, with brokers calling for lenders to launch new products.

Leeds Building Society said it experienced its biggest-ever month for holiday let purchase applications last September in a busy second half of 2020.

It is adding two five-year fixed deals at 60 per cent and 70 per cent loan to value (LTV) into its holiday let offering at 3.69 per cent and 4.29 per cent respectively.

Each comes with a free standard valuation, no product fees with fees assisted legal services available for remortgages.

“Holiday lets are a popular choice for our buy-to-let borrowers with the potential for higher yield returns,” said Matt Bartle, director of products at Leeds Building Society.

“Ongoing pandemic-related uncertainty around international travel adds to the likelihood that more Britons will holiday in the UK this year.

“Therefore, a suitable property in a prime tourist area may offer an opportunity for buy-to-let landlords to diversify their portfolio with a short let holiday property.

“We’ve expanded our holiday let range to offer more choice to borrowers, who may wish to take advantage of this under-served part of the mortgage market,” he added.

 

 

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