How and why do lenders treat properties that are subject to holiday lettings differently to those that are permanently let?
Properties which are subject to holiday lettings do not have a stable income throughout the year. Also the income is seasonal. The rental income is higher during the holiday season and is higher than permanently let houses. However at other times, the income will be very low or may even be zero. This creates the risk for the lender since there is great the probability of default by the borrower in such properties. Hence the lender will generally ask for a higher interest rate to compensate for the greater risk involved.
How and why do lenders treat properties that are subject to holiday lettings differently to those...
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