Free tool for UK landlords
Compare what you would actually keep from letting the same property three ways, as a standard buy to let, an HMO, or a holiday let. The headline rent is rarely the whole story, so this works out the net monthly income after running costs and an interest-only mortgage, using current five year fixed rates.
Enter a loan amount and the rent for at least one option to compare.
On gross rent a holiday let usually looks best, then an HMO, then a standard single let. Once costs come out the order often changes, because an HMO carries bills and heavier management and a holiday let carries cleaning, management and empty weeks. That is why this tool puts the net figure first rather than the headline rent.
There is no single winner. It depends on the property, the area and how hands on you want to be, which is exactly what the comparison above is for.
Money is only part of it. An HMO and a holiday let usually mean a lot more work, more regulation and more things that can go wrong than a single tenancy, and a holiday let income can swing with the seasons. The option that earns most on paper can be the wrong fit if you do not have the time or appetite for the extra management and risk.
Read the effort and risk alongside the numbers, not just the figure at the bottom.
Lenders tend to take the average of your low, mid and high season weekly rents and apply an occupancy well below a full year, often around 30 weeks, so the figure they work to is usually lower than a best case season. The weeks field above starts at 30 for that reason, and you can raise it to your own expected occupancy.
A projection from a holiday letting agency such as Sykes is the normal source, and it is what a lender often uses for the valuation too. Ask for the weekly low, mid and high season figures, as projections are frequently given as an annual total, which is not what a lender wants. It also helps to know what the property would earn as a standard buy to let, because some lenders ask for that as well.
Usually not. A standard buy to let mortgage is meant for a single household on a longer tenancy, so letting the property as a holiday let or on Airbnb can breach its terms. If the lender finds out, it can ask for the loan to be repaid, so you normally need a specific holiday let mortgage. The same applies to an HMO, which needs an HMO mortgage rather than a standard buy to let.
Make sure the mortgage matches how you actually plan to let the property before you commit to buying.
Usually the rate, yes, but not the deposit. HMO and holiday let mortgages tend to sit at higher rates than a standard buy to let and come from a smaller pool of lenders. The deposit is broadly the same though, as 75% loan to value products, meaning a 25% deposit, are common across all three, so you do not normally need to put down more for an HMO or a holiday let. This tool assumes 75% loan to value and uses a representative current five year fixed for each, which is part of why the cheaper standard rate can hold its own on net income.
To see how a rate feeds into the monthly cost on its own, our buy to let rates page and mortgage comparison tool go deeper.
Most lenders prefer to see some buy to let experience before they will consider an HMO or a holiday let, and both are harder to arrange for first time buyers and first time landlords, with fewer products to choose from.
So it is worth checking what you can actually borrow before you commit, since the option that earns most on paper is no help if the finance is out of reach. An HMO or holiday let lender, or a broker who handles these, can tell you what is realistic for your situation.
Not always. Whether an HMO needs a licence depends on its size and the local council, as some councils run extra licensing schemes on top of the mandatory rules. The smallest sharer set ups, often three tenants, may sit below the mandatory threshold, but whether a licence is needed is still down to the council.
Even where no licence is required, most lenders still expect the property to be set up and run as an HMO, with the fire safety and room standards that go with it, and many want a communal living area. Lenders also vary on whether tenants are on one joint agreement or individual room agreements. This is general information, not advice, so check with the council and see the gov.uk HMO licence guide.
Yes. Short term lets across Scotland need a licence from the local council, and some areas also run planning control areas that affect whether a licence can be granted at all. Because a licence is not guaranteed, it is worth checking with the council before you buy, not after.
Elsewhere in the UK, local rules and planning can still apply, so check the position for the specific area. This is general information rather than advice, and the official position for Scotland is on gov.scot.
How rental profit is taxed is not the same across the three. On a personally held buy to let, mortgage interest is usually given as a basic rate tax credit rather than a full deduction, and the way furnished holiday lets are taxed changed from April 2025, removing advantages they used to have.
Tax depends on your own circumstances and the current rules, so BTL Insight is not a tax adviser and this is signposting only. Check the current position with gov.uk or a qualified tax adviser before you decide.
For each option we take your gross rent, take off the running costs you set, then take off the interest-only mortgage cost. Holiday let income is the average of your seasonal weeklies spread across the weeks you choose, starting at 30, which is roughly what a lender uses for affordability. Any product fee is added to the loan and the monthly payment is worked out on that larger balance.
The result is an estimate to compare options on the same footing, not a quote or a promise of what a property will earn or what a lender will offer. It is information only, not financial advice.