If you’re new to holiday letting, it’s easy to focus on bookings and guests. However, managing the day-to-day finances of your property is just as important.
Whether you’re running your first holiday rental, have converted a second home into a holiday let or inherited a property, understanding how to manage seasonal rental income and ongoing costs can help you stay organised throughout the year.
Managing seasonal rental income
Holiday let bookings may peak during popular periods such as summer holidays, Easter breaks and Christmas getaways, but many properties are available to guests throughout the year. Landlords often find, regardless of the type or location of their property, there’ll be quieter weeks and months in booking demand.
Effectively managing seasonal rental income means recognising that peak and off-peak income can vary and planning your finances around this.
Our lending team often sees customers experience short-term pressure where payments become harder to manage for a month or two. This may be linked to seasonal rental income fluctuations or unexpected costs, rather than longer-term affordability or rental viability worries. Keeping this seasonality in mind can help you manage your holiday let income more effectively throughout the year.
Keep holiday let finances organised
Running a holiday let can be rewarding, but it also comes with responsibilities that some first-time landlords don’t expect, such as taxes, property maintenance, mortgage payments and other household bills.
Keeping on top of your income and expenses can make day-to-day management much easier. Some landlords may choose to use a separate savings or easy access account to help manage seasonal rental income more clearly.
- Keep clear records of rental income and outgoings
- Separate holiday let finances from personal spending where possible
- Regularly review bookings and expected income
- Set aside funds during busier periods for quieter months
- Make payments via Direct Debit
- Ensure the monthly payment date falls in line with the date you receive your income.
Budgeting for holiday lets
Some costs will be there whether or not a property is occupied. Understanding fixed and variable expenses can be a good starting point when you begin budgeting.
Holiday lets come with a mix of fixed and variable expenses. Having a good grasp of these can make budgeting easier and help you plan for quieter periods.
Some typical holiday let costs:
Fixed expenses:
- Mortgage repayments
- Insurance
- Licensing or software costs.
Variable expenses:
- Cleaning and changeovers
- Maintenance and repairs
- Utilities
- Booking platform or advertising fees.
If you can keep a log of what these are expected to be and plan for how to pay it can avoid surprises later in the year.
Understanding mortgage repayments and terms
Mortgage repayments are often a key part of holiday let financial planning.
Because income can vary across the year, it’s important to ensure regular payments are prioritised within your overall budgeting plan. You may find it helpful to set up a direct debit to help keep payments consistent.
In most cases, the short-term mortgage in arrears situations we see are not linked to long-term affordability issues but can be caused by:
- Seasonal rental income being lower than expected at certain times
- Unexpected maintenance or operating costs
- Administrative oversights when managing multiple outgoings.
Our lending team often sees these situations are temporary and can usually be resolved once income stabilises or budgeting is adjusted. We sometimes find payment issues can be resolved by changing the payment date to later in the month. If you’re having difficulties making payments on time, speaking to your lender early can help.
Find more information on Hodge Holiday Let mortgages and help and support on Hodge mortgages here.
Tax considerations for holiday lets
Holiday lets may involve tax obligations depending on your circumstances.
It’s important to ensure you set aside money for any tax payments and stay aware of reporting requirements. If you’re unsure, you should seek advice from a qualified tax professional.
Depending on your circumstances, some holiday let owners may be eligible to apply for business rates rather than council tax. Criteria will depend on factors such as where your property is located and how often your property is available to let each year. Find out more about eligibility on the Gov.UK website. Depending on your circumstances, paying business rates rather than council tax could reduce your overall costs.
Marketing and occupancy planning
Unlike long-term rentals, holiday lets rely heavily on ongoing bookings.
This means it’s important not to assume occupancy will remain consistent year-round. Many landlords use online holiday let platforms and advertising channels to help maintain visibility.
Renting your home as a holiday let: key considerations
If you’re using a second home or inherited property, it’s important to remember:
- Holiday lets are intended for short-term stays and not long-term renting
- The property should be used in line with your mortgage. For example, Hodge allows landlords to stay in their holiday let property for up to 90 days per year.
Remember mortgage terms will differ and will be subject to lending criteria and product terms. If you’re unsure, check your mortgage documentation or speak with your lender.
Looking for a holiday let mortgage?
If you’re thinking about a holiday let mortgage, Hodge offers a range of options designed to support landlords:
-
Airbnb properties are welcome
-
Landlords can stay in the property for up to 90 days each year
-
Interest-only and repayment options are available
-
We can lend on up to three holiday let properties
-
You don’t need to be an owner occupier
FAQs
This will depend on the lender and the terms of your mortgage. To understand how your payments work, check your mortgage documentation or contact your lender directly.
A Holiday Buy to Let should be treated as a business. By keeping records and monitoring income and expenses, as well as planning for future costs, you can stay organised and manage your property effectively, while helping to avoid unexpected financial surprises.
If you’re concerned about making a mortgage payment, it’s important to contact your lender as soon as possible. They may be able to discuss support available and can help you understand your options. Contact our Customer Care Team on 0800 1389129 where one of our team will be happy to help.
Each holiday let will vary, but typical costs can include mortgage repayments, tax and insurance, utilities, maintenance and possibly advertising or booking platform fees. It’s important to understand your regular costs so that you can make budgeting easier throughout the year.
Short–term arrears can occur for a range of reasons, including seasonal fluctuations in income, unexpected maintenance costs, or other administrative oversights. Our lending team often sees these situations resolved once income stabilises or payment arrangements are reviewed.
Holiday let income can vary throughout the year, with busier and quieter periods depending on demand. You may find it helpful to track income, expenses and bookings regularly and plan ahead for quiet income periods.
This will depend on the lender and the terms of your mortgage. To understand how your payments work, check your mortgage documentation or contact your lender directly.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE AND CAN IMPACT YOUR CREDIT FILE.
You must tell us immediately if you encounter financial difficulties and are having or will have trouble making your payments. We will contact you if a payment is missed, to discuss the reasons for this and how we can help. Remember mortgage terms will differ and will be subject to lending criteria and product terms. If you’re unsure, check your mortgage documentation or speak with your lender.
This article is correct at time of publishing and for general information purposes only. Our blogs my include a range of topics related to personal finance, including lifestyle and financial behavioural styles. This content is not intended to give advice or guide individual circumstances. If you need additional support, please reach out to charities offering support.
We don’t offer mortgages directly to the public. It’s a big decision, and you’ll need to speak to a financial adviser to make sure it’s the right one for you.
For financial advice, we recommend you speak to a professional financial adviser. You can find a financial adviser and further personal finance information at unbiased.co.uk.