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Suffolk Building Society enters expat holiday let market

1 Feb 2022

3 min read

Suffolk Building Society has responded to market demand for expat holiday let mortgages and launched a new standalone product, to bolster its existing expat residential and expat buy to let offering. The new product is available up to 80% LTV with a minimum loan of £75,000, a maximum loan of £750,000 and a minimum property value of £100,000 for properties in England and Wales.           

The new 2-year discount rate is priced at 3.85% (SVR currently at 5.39% minus 1.54%) for purchase and remortgages. Applications for Airbnb properties will be considered following the Society’s holiday let criteria update last month. In line with existing holiday let criteria, applications will be assessed on an average of low, mid and high season rental yield and this will need to be verified by an independent lettings agent, rather than Airbnb. The annual rental must provide a minimum of 145% rental coverage based on the initial pay rate +2% or a minimum of 5.5% (whichever is the greater).

Expat first time buyers and non-owner occupiers will be considered on an individual basis and for joint applications, at least one party must be a UK national and where the second applicant is a non UK national, the first applicant must satisfy The Society’s lending criteria.

This includes one of the applicants having a minimum income of £40,000 (GBP equivalent); being employed by a reputable employer where their income can be clearly verified; and for purchase cases, the deposit must be sourced from an account held in the applicant’s name. Most countries/currencies are eligible but the deposit must be held either in the UK or the country that the main applicant is residing.

Owners may occupy the mortgaged holiday let property for personal use for up to 60 days per year.

Head of Mortgage Sales, Charlotte Grimshaw, explains the Society’s decision to enter the expat holiday let market:

“As expat and holiday let specialists, we were naturally keen to respond to the demand, both from intermediaries and direct customers, for what is currently an underserved section of the market. Although many lenders will consider either holiday let or expat applications, very few consider them together. While according to Moneyfacts, the number of holiday let products for UK residents is booming with more than 200 deals available, the same cannot be said for products for expats with just a handful of lenders currently in the market.”

“We understand that increasing numbers of UK nationals are looking to invest in the UK holiday rental market, as the public rediscovers the beauty of British holidays and the pandemic continues to make travel abroad tricky. With 60 days personal use, this also provides a great base for those expats returning to the UK for longer holidays or to visit family, meaning they have a property of their own to stay in, alongside the rental income they’re earning too.”

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