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Last updated 21 February 2023.
85 (at the end of the mortgage term).
£25,000 per application.
Lending to companies or portfolio landlords is not accepted.
For sole applications: Applicant must be a UK citizen.
For joint applications: One of the applicants must be a UK citizen with the other applicant having settled status or permanent right to reside in the UK. The salaried applicant must be the UK citizen and contributing at least 50% of the total earnings in respect of the minimum income requirements.
Applicant must be owner occupier.
CCJs/Defaults within the last 3 years are not acceptable.
CCJs/Defaults => 3 years prior to application are acceptable up to a maximum £2,500 – subject to an explanation and being cleared/satisfied 12 months prior to application.
No other adverse entries must show on credit file.
Mortgage, loan, HP arrears and missed payments => 3 years prior to application: Status 1s and 2s are acceptable – status 3 or above not acceptable.
Mortgage, loan, HP arrears and missed payments within the last 3 years are not acceptable.
Credit card, mail order, utility commitments => 3 years prior to application: Up to and including status 2s are acceptable.
Credit card, mail order, utility commitments <3 years prior to application: Status 2 – OK to proceed subject to the commitment being up to date for a minimum of 12 months prior to application. =< Status 3 are OK subject to commitments totalling less than £500 and being up to date for a minimum of 12 months prior to application.
Applicants in probationary period are acceptable, providing they are in like-for-like employment with no gap in employment.
The applicant must have been in their current business for a minimum of 3 years.
For applicants on fixed-term contracts of less than 6 months, the minimum period of employment with the same employer is 6 months. For those on contracts of 6 – 12 months or more, the contract must have been renewed at least once. If the contract is for more than 12 months, the applicant must be more than 6 months into the contract.
The applicants’ own deposit is acceptable. Evidence of the source of deposit is required.
Interest Coverage Ratio (ICR) – 145% minimum rental cover based on reference rate of 5.5% or chosen product rate + 2% (whichever is the higher of the two)
For our 5-year fixed rate products, we now offer a revised stress rate as follows: 145% at product rate or 115% at product rate for top slicing cases.
For any other products considered less than 5 years, if there is a rental shortfall we will take a limited amount of earned income into our affordability assessment. The rental income must cover 100% at product rate + 2% or 5.5% (whichever is the higher of the two) with the shortfall made up from earned income.
Please note if more than one holiday let in portfolio, the portfolio must be self-financing for us to consider top slicing. Top slicing is limited to one Society application only.
For like for like Remortgage cases our Interest coverage ratio is product rate x 125%.
Please note the following with regards to eligibility:
3 years’ trading accounts where these are available and/or projection from professional Holiday Let Agent confirming weekly rental income for low/medium/high season and expected occupancy levels.
For Expat Furnished Holiday Let applications there are no currency restrictions if the rental income passes our Interest Coverage Ratio of 145% at 5.5% or chosen product rate + 2% (whichever is the higher of the two) see our Interest Coverage Ratio section for more information. Please note there is an exception that we wouldn’t accept currencies from countries listed on our Expat Country Exclusion List, available to download here.
When calculating foreign income, we look at the close exchange rate on the date of application with a haircut % depending on the currency.
We will apply a 10% haircut to the following currencies:
We will apply a 15% haircut to the following currencies:
We will apply a 20% haircut to the following currencies:
For all other currencies not mentioned above we would look at the lowest result of the three stress tests below:
Minimum: 5 years
Maximum: 35 years
We will consider remortgage applications where the applicant has been the registered owner for the past 6 months.
Your client can apply for a mortgage on a repayment basis, or an interest only basis. Part and part is not accepted. FHLs will be stressed on I/O even if the application is on a repayment basis, providing the applicant appears to have the means to support the higher monthly payment (monthly surplus and a good credit file/evidence maintained a repayment mortgage with their current lender).
A new residential mortgage can be considered where the applicant wishes to retain their current property on a FHL basis.
A maximum of 3 mortgaged BTL/FHLs can be held across any number of lenders, maximum exposure £1,500,000. We do not accept portfolio landlords, which applies if an applicant holds 4 or more mortgaged BTL/FHLs.
Long-term occupants. The property is only available for short-term holiday lets. Personal occupation is restricted to a maximum of 90 days in any one year.
No long-term lets or sub-letting allowed.
England and Wales.
Properties must be of traditional construction.
Timber framed properties may be considered if brick clad.
New build houses subject to NHBC/Local Authority Building Control Scheme/Premier/Checkmate
(Castle 10)/Buildzone/Zurich/ICW (International Construction Warranties)/AHCI Ltd or Professional Consultants Certificates – maximum 75% LTV.
Purpose built flats/maisonettes are acceptable (new builds not acceptable). Must be up to 60% LTV and leasehold.
Flats/apartments more than 4 storeys. If above 4 storeys, they must be serviced by at least 1 lift. Flats above 6 storeys are not acceptable.
Properties must be of traditional construction.
HMOs, self-builds, properties held in Trust, present or former hotels/guest houses/B&Bs, commercial properties (even if applicants intend to convert back to residential).
Holiday homes (such as static, mobile homes etc).
Studio flats and ex-local authority flats/maisonettes.
New build flats.
Flats above commercial property.
Properties under 5 storeys with a flat roof are unacceptable security.
Any construction covered by Housing Defect Legislation such as high alumina cement, prefabricate reinforced concrete, large panel system, BISF.
Any property where an EWS1 form for wall cladding is required.
Both freehold and leasehold are acceptable for houses.
Freehold flats/maisonettes are not acceptable- leasehold only.
Flying freeholds – refer.
For leasehold, there must be a minimum of 85 years’ unexpired lease at the start of the mortgage and 55 years remaining at the end. The lease must allow the property to be let as a holiday home.
A Service Agent Agreement will need to be completed by your client before the expat mortgage is completed. This will confirm the name and address of somebody in England or Wales who will act as the Service Agent and who the Society can serve papers to should the borrower fall into arrears and possession proceedings need to commence.
• Home improvements
• Debt consolidation (maximum £30,000)
• Purchase of an investment or second home
Please note evidence would need to be submitted to satisfy the above.
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