Holiday let deals have increased following a substantial drop towards the end of 2022, said Moneyfacts.

The financial information provider found that there are now 411 holiday mortgages on the market, up from 173 seen in October 2022.

There are now 34 different lenders offering these mortgages, eight more than in October 2022, the majority of which are currently building societies.

New rules for landlords

Moneyfacts said that government rules to be introduced in 2023 impact the demand for holiday let properties. Holiday lets will need to be rented for a minimum of 70 days a year and available to be rented out for 140 days a year, and homeowners will need to show evidence of their lettings and meet certain criteria to qualify for business rates relief.

These new rules are due to come into force this April and are designed to protect legitimate investors.

But Moneyfacts added that despite the new rules, ‘the cost of living crisis may encourage demand for UK holidays over a trip abroad’.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “The outlook for buy-to-let product choice in the holiday let market took a nosedive in the aftermath of the fiscal announcement, so it’s positive to see product availability bounce back. Lenders have returned to the market and average rates have come down since October 2022, but as seen in the wider buy-to-let market, it may take time for more improvements to surface. Building societies continue to dominate this space and overall, there are more than 400 deals to choose from, covering both fixed and variable rate options.

“Due to the pandemic, there was a huge demand for UK-based holidays, so buy-to-let investors could have seen the potential to dip into holiday lets.

“As the holiday aspirations of consumers change, demand for UK holidays could fall, but at the same time, the country is facing a cost of living crisis which may keep them interested in a more cost-effective UK break.”