Residential mortgages:
Second homes
A second home can serve many purposes. It might provide a convenient base near work, somewhere to enjoy weekends and holidays, or a home for a family member.
The right mortgage depends on who will occupy the property, how it will be used and how the borrowing fits alongside your existing commitments.
A property does not automatically need a buy-to-let mortgage simply because it is your second purchase. Equally, a residential mortgage arranged for personal use should not be assumed to allow paying guests or tenants.
Pieds-à-terre
A pied-à-terre is a secondary home used for occasional or regular stays, often close to work.
You might live with your family outside the city but need somewhere to stay during the working week. Alternatively, your work may involve spending time in different locations, making a second base useful.
Some lenders accept this as a second residential home, subject to their criteria and an assessment of the costs of maintaining both properties.
Explaining the arrangement
The lender will want to understand why you need the property, who will use it and which address will remain your main home.
Useful information may include:
The location of your main home and workplace.
How often you expect to stay at the second property.
Whether anyone else will occupy it.
Your existing mortgage or rental commitments.
Whether any part of the property will be let.
A clear explanation helps the lender assess the application under the appropriate criteria.
A UK base while living overseas
If your main home is abroad, buying a UK pied-à-terre introduces additional considerations.
Your country of residence, employment arrangements, income currency and UK credit history can all influence lender choice. A mortgage available to a UK resident buying a second home may not be available to someone living overseas.
For higher-value purchases or more complex international finances, a private bank may also be worth considering.
City apartments
A city apartment can provide a base for work, family visits or enjoying time away from your main home.
The intended use determines the mortgage approach. The apartment itself must also meet the lender’s property requirements.
Leasehold and building considerations
For a leasehold apartment, the lender and your solicitor will consider matters such as the remaining lease term, ground rent provisions, service charges and restrictions on occupation.
The building’s construction and condition can also affect mortgage availability. Where relevant, the lender may require information about external walls, fire safety or planned remediation.
Other features that can influence lender choice include:
Small floor areas or studio layouts.
High-rise buildings.
Apartments above or close to commercial premises.
Unusual construction.
Restrictions on resale or occupation.
These features do not necessarily prevent borrowing, but they can make lender selection more important.
Looking beyond the mortgage payment
Service charges can be a significant part of an apartment’s running costs, particularly where the building includes lifts, a concierge, leisure facilities or extensive communal areas.
Your solicitor should review the management information, including planned major works and any reserve fund. A manageable monthly mortgage payment may sit alongside substantial building costs.
Check that the lease permits your intended use, particularly if you may want to let the apartment in future.
Holiday homes
A holiday home bought for your own use may be suitable for a second residential mortgage.
The lender will generally assess whether your personal income can support the borrowing alongside your main home and other commitments.
This differs from a holiday-let mortgage, where the property is intended to accommodate paying guests and the lender may assess its rental potential.
Personal use and holiday letting
Decide at the outset whether the property will be:
Used solely by you, your family and friends.
Let to paying guests.
Used for a combination of personal holidays and commercial letting.
You should not assume that occasional Airbnb bookings are permitted under a residential mortgage. Even limited letting needs to fit the lender’s terms, as well as any planning, lease and insurance requirements.
Some holiday-let mortgages allow a period of personal use, but the permitted arrangements differ between lenders.
Find out more about holiday-let mortgages.
Checking occupancy restrictions
Some properties are subject to holiday-only use, seasonal occupation restrictions or conditions limiting who can live there.
A property marketed as a holiday home may therefore be quite different from an ordinary house that you choose to visit at weekends.
These restrictions can affect both mortgage availability and future resale. Your solicitor should establish the permitted use before you commit.
Park homes, lodges and properties on holiday parks may also require different funding from a conventional residential mortgage.
Insurance and periods away
A second home may stand empty for longer than your main residence.
Your insurer needs to understand the occupancy pattern, including how long the property may be unoccupied and whether anyone else will stay there.
Check any requirements concerning inspections, heating, water systems and security. The cover should reflect how the property will actually be used.
Homes for family members
You may want to buy somewhere for an elderly parent, provide accommodation for an adult child or help another family member live closer to you.
The mortgage arrangement depends on who will own the property, who will borrow and whether the family member will pay rent.
These details should be established before choosing a product.
Buying a property for a relative to occupy
Some lenders consider residential borrowing for a property occupied by a dependent relative, even where the borrower lives elsewhere.
However, lenders differ in the relationships and circumstances they accept. An arrangement for a financially dependent parent may be assessed differently from one involving an independent adult child.
The lender will usually need to understand how you will support the borrowing alongside your own housing costs. Any contribution from the relative should be disclosed rather than assumed to count towards affordability.
Letting to a family member
Charging rent does not automatically make a standard buy-to-let mortgage suitable.
Occupation by certain close family members can bring the borrowing within regulated mortgage lending. Many ordinary buy-to-let products do not permit this arrangement.
Your adviser will need to establish the relationship, occupancy and rental arrangements before identifying suitable lenders.
Find out more about letting to family.
Helping a relative buy in their own name
Buying a second property yourself is one possible approach. Helping the family member purchase their own home may offer other options.
These could include a gifted deposit, a family-assisted mortgage or a joint borrower, sole proprietor arrangement, where a supporting borrower takes responsibility for the mortgage without becoming an owner.
Each approach has different implications for borrowing, ownership and tax. Anyone joining the mortgage must understand their liability, including the effect on their own future borrowing.
Deposits and affordability
Deposit requirements for second homes vary by lender, property and intended use. Some lenders apply lower maximum loan-to-value limits than they would for a main residence.
The lender will also assess the wider financial picture, including existing mortgages, loans, household spending and the costs associated with both properties.
A second home used personally does not generate rental income to support the mortgage. The borrowing therefore needs to be sustainable from the income sources the lender accepts.
Using equity from your existing home
It may be possible to raise some or all of the deposit through a remortgage or additional borrowing secured against your main home.
That borrowing must be disclosed to the lender financing the second property. Both mortgage commitments need to be included in the affordability assessment.
Consider the combined cost, including any early repayment charges, fees and changes to your existing mortgage rate.
Releasing equity also increases the borrowing secured against your main home.
Purchase costs and ongoing expenses
The budget should cover the full cost of acquiring and maintaining another property.
Depending on the purchase, this may include:
Property purchase taxes.
Legal fees, searches and registration costs.
Surveys and lender valuations.
Mortgage product, arrangement or upfront booking fees.
Broker advice fees.
Any required indemnity insurance.
Council Tax or domestic rates.
Insurance, utilities and maintenance.
Service charges and ground rent where applicable.
Furnishing, security and travel costs.
Additional property purchases can attract higher property transaction taxes. The rules differ between England and Northern Ireland, Scotland and Wales, and ownership of property overseas may also be relevant.
Visit the UK government’s dedicated Stamp Duty page for more detail.
Some councils charge a Council Tax premium on second homes. Check the position with the relevant local authority, including whether any exception applies.
Planning around how you will use the property
The most suitable arrangement starts with a clear picture of what the second home is for.
A weekday apartment, a family holiday retreat and a property occupied by a parent can require different lending approaches, even where the purchase price and borrowing are similar.
Our role is to understand the intended use, assess the borrowing alongside your existing commitments and identify lenders comfortable with the arrangement.
It starts with a conversation.
Frequently asked questions.
Every client and every mortgage is different, but there are some questions we are asked regularly.
From affordability and deposits to complex income, expat mortgages and specialist property finance, our FAQs explain how different lenders may approach different circumstances.
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