UK Brokers Report Surge in Holiday Let Mortgage Demand

Nearly nine in ten UK mortgage brokers say they have seen more demand for holiday let mortgages over the past year, according to a broker poll reported in the trade press. The figure lands as the tax regime that made furnished holiday lets a favored buy-to-let alternative is being dismantled, which makes the timing worth a second look for anyone financing a short-term rental purchase in the UK this year.

What brokers are actually seeing

The 88% figure describes brokers reporting increased inquiries and applications for mortgages on properties intended for holiday letting, not a count of completed purchases or a measure of occupancy. It says nothing about loan sizes, approval rates or how many of those inquiries convert into finished deals. Brokers are a useful early indicator of buyer intent, but the number is a sentiment reading, not a transaction count.

Why the tax backdrop makes this notable

The UK abolished the Furnished Holiday Lettings tax regime from April 6, 2025, ending the ability of holiday let owners to claim mortgage interest relief in full, capital allowances and certain capital gains reliefs that ordinary buy-to-let landlords never had. That change was expected to cool interest in holiday lets as an investment class, since it erased much of the tax advantage that separated them from standard rentals. A rise in mortgage inquiries running alongside that change suggests buyers are pricing in the loss of relief and proceeding anyway, likely on the strength of nightly rates and occupancy in popular coastal and rural markets rather than the tax treatment.

What this means for people already operating

More borrowers chasing holiday let mortgages usually means more competition for the same stock of coastal cottages, lakeside cabins and rural conversions that make good short-term rentals, which can push acquisition prices up in markets that are already tight. Existing operators refinancing this year should expect lenders to apply stricter affordability tests now that mortgage interest is no longer offset the way it was under the old tax rules, and should budget for higher effective borrowing costs even where headline mortgage rates hold steady. Anyone financing a first holiday let purchase should get a rate comparison across several specialist lenders rather than assuming last year's product range and criteria still apply, since several lenders adjusted holiday let underwriting once the FHL rules changed.

None of this changes what already works operationally: strong pricing discipline, good turnover logistics and accurate occupancy forecasting matter more than ever when the tax cushion is gone and financing costs are under closer scrutiny. Brokers reporting rising demand is a signal worth watching over the next two or three quarters, not a verdict on the sector's health.