Mortgage products · short-term lets
Limited company holiday let mortgages, arranged by specialists.
A limited company holiday let mortgage is finance advanced to a company on a property let short-term to paying guests rather than on a tenancy agreement. The lender pool is the smallest in company buy-to-let and the underwriting runs on seasonal projections, two reasons this product rewards a broker who knows exactly which doors are open.
Advice from
Matt Lenzie · 25+ year career banker (Bank of Scotland, Lloyds Banking Group). £300m+ raised for property clients.
25+ year career banker (Bank of Scotland, Lloyds Banking Group). £300m+ raised for property clients.
The combination
Why has holiday letting moved into company structures?
Tax change did it. Until April 2025, the furnished holiday lettings regime gave personally held holiday lets privileges ordinary rentals never had, including full mortgage interest relief. The regime's abolition removed that advantage at a stroke and left personally held holiday lets exposed to Section 24's restricted interest relief like any other rental. The company wrapper restores what the regime used to provide: mortgage interest fully deductible as a business expense, profits taxed at corporation tax rates of 19 to 25%, and retained earnings recycling into the next property without touching the directors' personal returns. For higher-rate taxpayers buying coastal or tourist-market property, the structural logic now points the same way it does for standard lets.
The trade-off is choice. Holiday let lending was always a specialist corner, and the subset of those lenders that also accepts limited company borrowers is smaller again. That pool is genuinely good, but it has to be approached deliberately rather than discovered by trial and error.
The wider tax background sits in the Section 24 guide · compare both routes on the limited company vs personal calculator.
Underwriting
How do lenders assess income with no tenancy agreement?
On projections. Instead of a single contractual rent, the lender asks a recognised holiday letting agency to estimate the property's weekly income in low, mid and high season, then typically works from an average of the three at an assumed number of letting weeks. That figure is stressed for cover in the usual company way, with the 125% interest coverage ratio applying to limited company applicants. Some lenders take a simpler route and assess the property on the rent it would achieve as a standard tenancy, which protects them against seasonality but can understate a strong holiday market considerably. The same cottage can therefore support quite different loans at different lenders, purely on assessment method, and choosing the method that flatters your property is legitimate, free, and exactly the kind of placement decision we make daily.
Established holiday lets with accounts can usually evidence actual performance instead of projections, which widens appetite and sharpens pricing. Keep booking records from day one; they become underwriting currency at the first remortgage.
Run cover numbers on your projection · the mechanics are in the ICR stress tests guide.
Deposit and leverage
What deposit does a company holiday let need?
More than a standard let. Holiday let lending to companies typically runs at 60 to 75% loan to value, with 75% the practical ceiling and several lenders preferring the deeper end of the range for remote locations or non-standard property. On a coastal cottage that means a deposit of 25 to 40%, entering the company as a documented director's loan in the usual way, plus the stamp duty surcharge that attaches to every company residential purchase (the Additional Dwelling Supplement in Scotland, where a large share of UK holiday stock sits). Factor in furnishing to a guest standard, changeover and management costs, and a cash buffer for the shoulder months: lenders like to see that the company is capitalised for seasonality, not just for completion day.
Deposit structuring detail in the director's loan deposits guide.
The rulebook
Which occupancy and planning rules trip buyers up?
Three recur. Personal use first: lenders cap how much the owners can occupy the property, commonly around 60 to 90 days a year, and through a company your accountant should also confirm the benefit-in-kind position before directors book themselves in. Planning second: some tourist-area properties carry holiday occupancy conditions restricting year-round residence, several councils now require planning consent to convert a dwelling to short-term letting, and Scotland and Wales operate licensing and registration schemes for short-term lets; lenders want the property's status clear at application. Platform letting third: a property let on short-stay platforms without holiday let consent from its mortgage lender is a breach of conditions, which is how many accidental cases arrive at our desk, remortgaging from a standard product onto proper holiday let terms.
What underwrites well
What makes a holiday let case strong on paper?
Location with a letting market, not just a view. Underwriters and their valuers want evidence that the property sits somewhere people book year-round or at least three seasons: established coastal and national-park markets, cities with leisure demand, villages with a proven agency presence. A beautiful house in a market with no comparable letting evidence forces the valuer to be conservative, and the projection, the number the whole loan is built on, sags with it. Property type matters next: conventional construction, sensible access, no agricultural ties or occupancy conditions, and enough bedrooms to make the weekly rates work. Finally, the operating plan: a recognised local letting agency on board, or a credible self-management plan with changeover cover, reassures the lender that the projection will be pursued rather than hoped for.
The company side of the file should be just as tidy: a clean special purpose vehicle with property SIC codes, the deposit documented as a director's loan, and directors whose personal income clears any floor the chosen lender sets. Holiday let underwriting is manual almost everywhere, which cuts both ways, a well-evidenced unusual case can place, and a sloppy ordinary one can stall.
Switching strategy
Can an existing rental remortgage into holiday letting?
Yes, and it is one of the most common holiday let transactions we arrange. A company holding a property on a standard tenancy can remortgage onto a holiday let product when the tenancy ends, with the new lender underwriting the seasonal projection rather than the old rent; done in the right local market, the income uplift is substantial. The reverse remortgage also happens, holiday lets returning to standard terms where seasonality disappointed, and the standard market is always the deeper one to fall back into. Either direction, the switch is a full remortgage with fresh valuation and guarantees, so it should be timed against the current product's early repayment charges, and ideally bundled with any capital raising the company wants for its next purchase.
Timing and mechanics on the limited company remortgages page.
Lender pool
Who actually lends on company holiday lets?
The names with genuine appetite include Cumberland, Suffolk Building Society, Furness Building Society, Hodge: predominantly regional building societies and specialists whose manual underwriting suits a product where no two properties or projections look alike. Criteria differences are wide, minimum personal income floors at some, geographic preferences at others, different personal-use caps everywhere, and several of the pool quote only through intermediaries. A declined direct application is usually a placement error rather than a bad case.
The company structure itself starts at the limited company buy-to-let hub or the SPV mortgages explainer, and room-let rather than guest-let income belongs on limited company HMO mortgages. Coastal and tourist-market data, sold prices and rents, sits across our 244 town pages.
Frequently asked questions
Can I buy a holiday let through a limited company?
Yes. A growing minority of holiday let lenders accept limited company applicants, usually a special purpose vehicle with property SIC codes, and the structure works the same way as any company buy-to-let: the company owns and borrows, the directors guarantee, and the letting income services the loan. The lender pool is smaller than for standard company buy-to-let, which makes whole-of-market placement more valuable, not less.
What is the loophole for holiday let tax?
There is no loophole, and anyone selling one is worth avoiding. The favourable furnished holiday lettings tax regime was abolished from April 2025, which removed the personal-ownership advantages that used to drive this market. What remains is the ordinary company arithmetic: inside a limited company, mortgage interest stays fully deductible and profits face corporation tax at 19 to 25%, which is precisely why more holiday let purchases now happen through companies. Take advice from your accountant on your own position; we handle the finance leg.
What is the 3 7 3 rule?
It is not a term UK holiday let lenders use, and no formal "3 7 3 rule" exists in their criteria. The numbers that genuinely mattered were the old furnished holiday lettings tests, available 210 days and actually let 105 days a year, which died with the FHL regime in April 2025. What lenders check today is different: a letting projection from a recognised holiday letting agent, any planning or occupancy restrictions on the property, and limits on your own personal use of it.
Can I get a mortgage on a holiday let?
Yes, from a specialist segment of the market that underwrites projected letting income rather than a single tenancy rent. Expect a deposit of 25 to 40% depending on the lender, an income projection across low, mid and high season from a holiday letting agency, and questions about location, planning restrictions and personal use. Through a company, the same fundamentals apply with the directors standing behind the loan through personal guarantees.
Can I stay in the property myself?
Usually, within limits. Most holiday let lenders permit some owner occupation, commonly capped around 60 to 90 days a year, and prohibit using the property as a main residence. Through a limited company there is an extra wrinkle: director use of a company asset can create a benefit-in-kind charge, so agree the arrangement with your accountant as well as respecting the lender's cap.
What does arranging a company holiday let mortgage cost?
Lender fees mirror the wider company buy-to-let market, with arrangement fees often percentage-based. Our broking fee is contingent on completion: 1% of loan on successful drawdown, lender proc fee first, client top-up only if proc < 1%.
Enquiry
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