Hanley opens 80% holiday-let lending to expats and first-time landlords — but London’s 90-night rule still bites

Hanley Economic Building Society is now offering holiday-let mortgages up to 80% LTV to a wider pool of borrowers, including expats, applicants with foreign income and first-time landlords — a notable shift in a market where short-let finance is often tighter and more specialist.

The new range includes a two-year discount at 5.54% and a term discount at 5.4%, with loans from £30,000 to £600,000 for purchase or remortgage, on either repayment or interest-only terms. Hanley says it will accept Airbnb-style short lets, has no geographic restrictions, and allows up to 90 days of personal use each year.

That broadens funding options. It does not mean a London property is automatically suitable for holiday letting.

The mortgage is only one permission

For London landlords, the bigger compliance risks usually sit outside the mortgage offer: planning rules, lease covenants, freeholder restrictions, insurance terms and local licensing requirements. A lender may be willing to fund a holiday let, but that does not override the legal or practical limits on how the property can actually be used.

The most obvious example is London’s 90-night planning rule. Under the Deregulation Act 2015, using residential accommodation in Greater London as temporary sleeping accommodation for more than 90 nights in a calendar year can require planning permission unless an exception applies. That is separate from Hanley’s 90-day owner-use cap. One is a planning rule; the other is a mortgage condition. They are not interchangeable.

Leasehold is where many short-let plans fail

This matters particularly in boroughs with large amounts of leasehold stock, including Westminster, Kensington and Chelsea, Camden, Wandsworth and Tower Hamlets. Many leases restrict short-term occupation, business use or subletting except on conventional residential terms. Management companies may also impose building rules that effectively block Airbnb-style use.

A lender’s approval does not neutralise those restrictions. If the lease prohibits short lets, the landlord can still face enforcement by the freeholder or managing agent, and insurance problems may follow if the use was never permitted in the first place.

Before exchange or before changing the use of an existing property, landlords should review the lease, any deed of variation and current management regulations rather than relying on assumptions.

Insurance is a frequent weak point

Standard landlord insurance is often unsuitable for holiday lets. Policies may exclude paying guests, frequent changeovers, accidental damage by short-stay occupiers or liability linked to platform bookings. In blocks, landlords should also check whether the freeholder’s buildings policy contains restrictions tied to short-term use.

Before the first booking, get written confirmation that the cover expressly includes short-term or holiday letting, platform-based bookings and appropriate property owner liability.

Manual underwriting means more evidence, not less

Hanley says cases are underwritten individually in-house with no credit scoring. That may help borrowers who sit outside mainstream criteria, especially expats and applicants with overseas income, but it usually means a more detailed evidence trail.

Applicants should expect requests for income documents, bank statements, proof of residence, tax records and source-of-funds information in a form the lender can verify. Because the product is available through selected brokers, the quality of packaging will matter.

Safety, licensing and tax still need separate checks

The lender launch does not create a single London rulebook for operation. Depending on the property and how it will be occupied, landlords may still need to consider planning consent, HMO licensing or borough-specific requirements.

Core safety duties remain unchanged. Before taking bookings, make sure gas safety, electrical safety, smoke alarms, carbon monoxide alarms where required, and fire precautions suited to a high-turnover letting model are all in place.

Tax also needs separate advice. A holiday-let mortgage does not create any special tax treatment by itself. Anyone moving from a conventional tenancy to short lets — or mixing personal use with guest bookings — should ask an accountant to confirm the position before launch.

What landlords should do before listing

First, confirm in writing that the case fits Hanley’s criteria, including the 90-day personal-use cap and any evidence needed for foreign income.

Second, check the lease, freeholder rules and local authority position before marketing the property.

Third, replace any generic landlord policy with insurance that explicitly covers holiday letting, and make sure the safety file is current before the first guest arrives.

Rentals & Sales can review a London property’s lease, compliance file and short-let readiness before you market it under a holiday-let mortgage.