Some 85% expect to see an increase in demand for these type of products.
The vast majority (85%) of mortgage brokers expect an increase in demand for holiday let loans, Cambridge & Counties Bank has found.
Of this, 29% expect a significant rise.
Meanwhile, around one in 10 (11%) expect demand to stay flat and just 2% expect a fall in demand.
Simon Lindley, chief development officer at Cambridge & Counties Bank, said: “The UK is very likely to become a much more attractive holiday destination and one result is an expected boom in demand for quality UK holiday lets.
“The specialist lending market for this sector has historically been underserved but Cambridge & Counties Bank is focussed on leading the market and we firmly believe our product provides a dedicated solution in the UK.”
On average, brokers expect lending volumes to grow 11% over the next 12 months with 5% of mortgage brokers predicting volumes will increase by more than 15%.
The key reason given for the rise in demand from property investors for UK holiday lets was a direct consequence of Brexit and the fall in the value of the pound favouring UK holidays, as cited by 45% of brokers.
Other reasons included the favourable taxation for holiday properties (41%); an expected rise in UK holidaymakers choosing UK holidays over the foreign trips (40%); and an expected rise in tourists looking for UK holidays (37%).
Nearly three in 10 (29%) said that better yields from holiday lets versus traditional buy-to-lets was a key driver of growth.
However, almost half (45%) of brokers said that the market in lending products designed specifically to cater for holiday let investors was “under competitive” and ripe for new entrants.
Almost two thirds said products need to be tailored more for their specific needs and 26% found there is little differentiation in the market.
To further boost lending in the sector, two thirds of mortgage brokers (66%) said products should be made available for larger portfolios and borrowings.
In addition, two fifths of brokers said that mortgage terms should be lengthened whilst 31% said income criteria should be relaxed.
