Agents set to benefit as staycation demand continues and tax breaks make holiday lets ‘a nice little earner’ as an alternative buy-to-let model.
With the staycation market likely to continue, holiday homes represent a good investment opportunity, according specialist marketers Fabrik Invest.
Pandemic-related travel restrictions have been driving a staycation boom in the UK, as families turn to lodges, holiday lets, caravans and campsites to enjoy their downtime this summer.
Researcher at Mintel estimates holidaymakers’ collective spend over the summer will total £7.1bn – 22% more than during the same period in 2019, before Covid.
But what will happen once international travel opens up again? Is the staycation market really here to stay? According to the team at Fabrik Invest, it most certainly is.
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STAYCATION BOOM
“The longer-term nature of travel restrictions means a staycation boom not just for this summer but in all likelihood for next year too, and potentially the year after,” said Dale Anderson, managing director of Fabrik Invest, which works with select holiday park developments.
“Even once restrictions are lifted, we anticipate that many families will still feel reluctant to fly and so will look to take breaks in the UK instead.
“Add to that those who choose not to fly for environmental reasons and those who can’t or won’t have the Covid-19 vaccine, and so probably won’t be able to fly, and the long-term prospects of the holiday let market here in the UK look very healthy indeed.”
ANOTHER INCOME STREAM
Holiday park homes offer another potential income stream for agents, particularly with residential property in short supply.
Anderson points out that holiday chalets offer much better tax breaks to owners than conventional buy-to-let properties, and don’t usually incur stamp duty.
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He also believes that with the new trend of working from home likely to stay, at least in part, there will be increasing corporate use of holiday parks for team-building exercises.
“There’s an exciting long-term future ahead for UK holiday lets,” he added.
“The current staycation boom has served to focus attention on this type of investment and its advantages. Over the longer-term, holiday lets provide one of the highest-yielding types of property investment.”
POTENTIAL YIELDS
For investors currently looking at the holiday lets market for the first time, the Fabrik Invest team advises opting for a property that uses pre-pandemic occupancy levels in its forecasting. This should provide a realistic long-term view of potential yields.
Finding an investment that has a reputable management company in place is also important for those looking for a well-managed, hands-off investment.
The latest development being marketed by Fabrik Invest, The Hideaway by Liv Lodges, is set in the Lincolnshire countryside, on the doorstep of the spa and golf facilities at Woodhall Spa.
The luxury lodges come complete with their own outdoor space with hot-tub, while The Hideaway is also home to an on-site gym, games room, children’s play area, Xbox and PlayStation room, farm shop, café, restaurant and bar.
By Richard Reed
Source: The Negotiator