Delays and wider issues expected during October half-term getaway
If you thought overseas travel turmoil was a thing of the past, think again. October half-term is set to be the latest hit as airports and airlines struggle with staff numbers post-COVID.
As a result, the popularity of holidaying in the UK remains strong, boosting demand for quality short-term rental accommodation and, in turn, giving mortgage brokers an opportunity to make the most of a buoyant holiday let market.
Overseas travel restrictions
“Having experienced significant travel delays, strikes and COVID restrictions during peak travel times in 2022, the future of overseas travel remains uncertain,” said Jean Errington (pictured), business development manager at Harpenden Building Society.
Errington outlined that Brits wanting a more trouble-free option continue to holiday on home soil, as she said overseas travel remains unreliable creating demand for UK holiday let options.
Ongoing issues boosting UK holiday let interest
Heathrow, the UK’s busiest airport, announced it will extend its cap on passenger numbers, with no more than 100,000 daily travellers being able to depart until October 29. Indeed in a survey of 4,963 households covering the period of August 31-September 11, the Office for National Statistics found that over a quarter of international travellers in the previous 12 weeks experienced some form of disruption.
“In addition, a historically weak British Pound versus the US Dollar and to a lesser degree the Euro, means that Sterling just is not going as far anymore when heading overseas,” said Errington.
This, she believes, will inevitably lead to more expensive foreign holidays and the value of spending money sharply decreasing, which she said is yet another indicator that the UK will be the place to holiday in.
Read more: Holiday let options grow by 72% in one year
“As holiday makers look to avoid these issues and choose to spend leisure time in the UK, we continue to receive strong interest from brokers and their investor customers wanting to finance UK holiday let property,” Errington added.
Taking a specialist approach
Errington said, from her experience, holiday let purchases are often made by customers with multiple forms of income from a range of financial sources. Mortgage applications assessed by a mainstream lender cannot always accommodate customers with a complex income.
Applications assessed on mass by an algorithm, a popular assessment tool used in isolation by many larger lenders, Errington said, can be rejected at the first step for those customers with a non-standard financial profile.
“Look for a lender that uses rental income projections when considering applications, as well as taking a holistic view of a client’s financial circumstances,” she said.
Some specialist lenders manually underwrite every mortgage application helping to take a considered view; to assess the risk in more detail and to look at the wider picture. With in-depth scrutiny from manual underwriting, a complex holiday let mortgage application can often proceed, she said, and is likely to be the best option for brokers and their clients.