The holiday let sector may be specialist but remains one of the most dynamic parts of the UK property market. While the pandemic originally drove demand for domestic breaks, a large proportion of travellers have continued to choose UK destinations even after global travel resumed.
By the end of this year, the holiday let market is forecast to reach £3.2 billion, according to Mintel, reflecting sustained growth in domestic bookings and a rising appetite for more personalised, flexible stays.
In our experience, investor interest is strongest in locations with proven demand such as coastal towns, countryside retreats and heritage hotspots. However, changes to the tax regime from April 2025 brought furnished holiday lets in line with buy-to-let rules. Coupled with new licensing requirements, these changes have reduced the number of term mortgage lenders operating in this space and so affordability and lending criteria have tightened.
Opportunity knocks
Market shifts like these continue to create opportunities for specialist lenders. Bridging can fund acquisitions, or refurbishments and restructure financing arrangements ahead of moving onto a term mortgage. It also offers a route to buy a property when opportunities arise suddenly but the completion window is too short for high-street lenders to even contemplate.
One recent holiday let case of ours illustrates the point. The client had identified a desirable property in a location with strong year-round tourist demand and premium rental yields. With only two weeks to complete, a conventional mortgage was never an option. The only workable route was a bridging facility capable of delivering speed without compromising the structure of the deal.
The transaction wasn’t straightforward. The £454,790 loan required a multi-security structure across three separate properties. A traditional valuation process would have taken too long and driven up costs, so a hybrid model was used. Automated valuation models were combined with desktop assessments, enabling the lender to satisfy due diligence while keeping the process moving.
Competitive terms were just as important as speed. The rate was agreed at a competitive rate for the 61% loan-to-value sum, along with a £1,000 contribution towards the client’s legal fees. But the purchase completed well inside the two-week window, making for a pleased client.
The fastest route through
When brokers know the market, they’ll be able to source bridging deals that work harder when time is short.
For lenders with a processing structure built to accelerate decision-making, with short reporting lines and direct access to underwriters, rising to the challenge of a fast completion is possible. That operational model is particularly valuable in time-critical situations where every day counts. In the holiday let case outlined above, the combination of an immediate decision in principle, hybrid valuations and upfront legal fee support kept the transaction firmly on track.
