Holiday Let Mortgage for Four Holiday Cottages in Scotland

Positive Commercial Finance specialises in arranging Buy to Let Mortgages for investors and business owners looking to generate income from short-term rental properties. This case study shows how we helped a couple purchase four holiday cottages in Scotland, creating a new business and retirement income stream.

The Challenge

After a long and successful working life, our clients were planning for retirement.

Although they wanted to reduce their workload, they did not want to stop working altogether. Instead, they were looking for a business that would provide flexibility and long-term income.

An opportunity soon emerged.

The clients had previously stayed at a holiday cottage in Scotland and knew the area well. When that cottage, along with three neighbouring cottages, became available for sale, they decided to explore the possibility of purchasing all four properties and operating them as holiday lets.

While they had savings available and could access funds from their pensions, they had limited experience in the holiday let sector.

As a result, they needed a lender that would:

• Consider first-time holiday let operators.
• Assess the viability of the proposed business.
• Provide a competitive loan-to-value ratio.
• Support a long-term investment strategy.

Our Solution

Positive Commercial Finance approached specialist lenders with experience in Holiday Buy to Let Mortgages and holiday cottage businesses.

Before submitting the application, we discussed the proposal with potential lenders to understand exactly what information would be required.

We then worked with the clients to prepare a detailed business plan and financial projections.

To strengthen the application further, we obtained supporting evidence from a local holiday letting agency, demonstrating the rental demand and income potential of the cottages.

This gave the lender confidence that the business plan was realistic and achievable.

As a result, the lender approved a mortgage facility of £420,000 against a combined purchase price of £600,000.

Deal Structure

• Loan to Value (LTV): 70%
• Loan Amount: £420,000
• Interest Rate: 3.99% over Base Rate
• Arrangement Fee: 0.75%
• Repayment Basis: Interest Only
• Term: 10 years

The Outcome

The clients successfully purchased all four holiday cottages and began building a new retirement business based around short-term holiday accommodation.

By securing a long-term, interest-only funding solution, they were able to preserve capital while maximising cash flow during the early years of ownership.

This case study demonstrates how a Holiday Buy to Let Mortgage can help aspiring operators purchase holiday accommodation businesses, even if they have limited direct experience in the sector.