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Scottish holiday lets reports one of the busiest summers on record

Holiday let owners in Scotland are in the midst of one of the busiest summers on record following the uneasing from lockdown restrictions, according to brand new research from Sykes Holiday Cottages.

It found a third (31%) of Brits will enjoy a staycation in Scotland this year – with three quarters (76%) of Scots also holidaying in their own country this year.

The inaugural Scotland Staycation Index 2021 analyses Sykes Holiday Cottages’ booking internal booking data from January 2014 to July 2021, consumer research and revenue data.

Supporting consumer research of 2,000 UK adults and 1,000 Scottish adults was carried out by Censuswide in July 2021.

With foreign travel restrictions still in place, Sykes’ Index highlights a 22% uplift in Scottish holiday let bookings for this summer compared to 2019, and a 46% increase for autumn and winter.

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Sykes reports 92% occupancy rate for its Scottish holiday lets over June, July and August 2021. It found that July had 70% more bookings this year than in 2019.

It claims that holiday lets in Scotland faced a 52% increase in bookings following the UK and Scottish Government unveiling the roadmap out of lockdown in February.

The company also revealed that the staycation boom this year is anticipated to boost the Scottish economy by £16bn.

The index also reveals that, prior to the pandemic, the average Sykes owner in Scotland earned £16,000 in revenue per year from their holiday let – a number that is expected to jump dramatically this year due to the rise in bookings.

And with income potential rising, the pandemic has also fuelled a 65% increase in enquiries from second homeowners and investors looking to get into holiday letting versus last year.

The research revealed a quarter (24%) of Scots say the pandemic has made them more likely to consider holiday letting as a means to providing extra income at some point in the future.

The Highlands and Islands is one of the most lucrative destinations for holiday let owners in Scotland, with an average revenue of almost £19,000 for a three-bedroom property annually.

It is also the most popular region for travel in Scotland in 2021, according to Sykes’ booking data.

Perth & Kinross was £16,300 for a three bedroom property with Aberdeenshire for a three bedroom property bringing up to £21,000 with both also featuring in the list of popular destinations for bookings this summer.

Sykes’ analysis compared its owners’ rental income with Scottish government rental figures, along with house price data from Home.co.uk, to reveal the areas with the strongest return of investment return on interest (ROI) in Scotland.

Ayrshire came out on top, with an average ROI of 12% for holiday lets in this area compared to an average of 5% for longer term buy-to-let properties.

Holiday let owners in Fife could see a potential ROI of 11%, compared to buy-to-let investors whose returns in this region average 5%.

Sykes also reports that guests are looking for a little luxury in Scotland, with the holiday let agency seeing a 59% increase in bookings to its more luxurious properties compared to prior to the pandemic.

By John Glover

Source: Insider

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South East England generates highest yields for holiday let

South East England is a holiday rental hotspot commanding average yields higher than any other region of the UK, analysis by lender Hodge has found.

According to Hodge’s holiday let mortgage analysis, during the high season in summer, it costs an average £1,910 a week to stay at a property in South East England.

This is followed by the South West where a week’s stay costs £1,769 and East of England, where the average stay is £1,569.

In Wales, renting a holiday home for a week can amount to £1,418, while a holiday property in North West England can generate £1,302.

Scotland is the cheapest part of the UK to vacation in during high season, with average weekly rents at £1,222.

Overall, in the UK the average rental yield is £1,556 at high season, £1,107 at mid-season and £795 in low season.

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Emma Graham (pictured), business development director at Hodge, said: “When brokers and intermediaries come to us with a holiday let application we ask them for the average rental yield for that property, from that we can calculate how much an average rental for that region is during the different seasons.

“What our data shows is there has been some slight fluctuation in the market over the past year, with rental yield prices going up and down marginally, but that areas like the South East and South West are always the most profitable when it comes to running a holiday let business, as rental yields are always high.”

Graham added: “It will be interesting to see how the rental yields will change over the next 12 months as restrictions on travel ease and more people are able to holiday abroad.

“What is clear to see is holiday lets have been hugely popular in the past six months, not only in terms of sales but also in terms of the rental owners are able to charge, and holiday lets have been a sound investment for many if they have been able to buy one at the right time and at the right price.”

By Shekina Tuahene

Source: Mortgage Solutions

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Lancashire town named one of most popular places for second homes in UK

Blackpool has been named amongst the most popular towns where people want to have a second-home in the UK.

According to research, carried out by Lakeshore Leisure Group, Blackpool is the thirteenth most desirable town for a second home in the country.

The study analysed the Google search history of over 100 UK cities since the beginning of the first national Covid lockdown, to find which coastal and rural locations were being searched for the most in relation to second-homes and holiday homes.

There was almost 6,790 Google searches made by the UK’s city dwellers for ‘Blackpool second homes’ since lockdown began.

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Overall, the research found that people are most interested in second home properties located in Salcombe, Falmouth and North Berwick.

Almost 20,000 searches were made on Google in relation to Salcombe properties.

A spokesperson for Lakeshore Leisure Group, said: “The combination of Brexit and the Covid pandemic has prompted city dwellers to find a way to regularly escape their urban homes and guarantee a much-needed holiday escape whilst international leisure travel remains so uncertain.

“The huge increase in interest for a semi-permanent rural escape since the start of Covid is easily evidenced in people’s online behaviour; Google Trends shows an all-time high for ‘second home’ searches in July 2020 which have remained high into 2021, and rising property prices in the South West and other rural towns and villages across the UK prove the interest is turning into serious demand.”

By Chantelle Heeds

Source: Lancs Live

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UK holiday homeowners could make ‘£3,000’ weekly if they pick the right property

UK HOLIDAY homeownership has shot up across the UK in the last year, with sales propelled by the popularity of domestic vacations are a result of coronavirus international travel restrictions. But how can those looking to buy be sure they’ve picked the right property?

According to Raoul Fraser, founder of UK holiday park provider Lovat Parks, those looking to purchase a staycation property “shouldn’t think of them as investments”. However, he does note that holiday homes in certain locations have the potential to help owners make money by renting them out.

In the last 18 months, Mr Fraser says some homeowners have managed to attract even more guests than normal, and earn enough money to help cover the costs of their staycation property.

He told Express.co.uk: “We’ve seen some customers rent their holiday homes for over 3000 pounds a week. We do not say that customers should think of these as investments, but if you think about that your payback can be up to five or six years.”

For Britons just dipping their toes into the world of holiday homeownership, however, the prospect of purchasing may seem daunting.

Luckily, Mr Fraser shared some of his top five tips to help homeowners pick the right staycation property.

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Research the holiday park you are purchasing a home within

Many holiday homes across the UK are housed on existing holiday parks, such as Lovat Parks.

Lovat Parks, for example, has eight holiday parks across the UK – seven of which offer the opportunity for people to purchase a holiday home within the park.

According to Mr Fraser, if Britons are hoping to buy a staycation property, it is vital they look into the park they are hoping to purchase from.

He explained: “I would always as the park operator if they are members of the two trade bodies, The British Holiday Park and Home Parks Association or the Caravan Council because they have rules and regulations that you have to abide by and I think that’s important.”

He continued: “We always say to customers, even if you don’t buy from us, when you’re thinking about it, buy from someone who is financially solvent.

“Buy from someone who treats their customers properly, because that is really important.

“Unfortunately, there are some operators like in any industry, who are often the customers.”

Mr Fraser also advises speaking to other customers on-site to find out what the holiday park is like to spend time on.

He said: “You want to go with a company whom you think does care about the experience and make sure you speak to customers on-site, so that you can hear of their experience and how it’s gone for them.”

Pick the right price point for your holiday home

The cost of holiday homes varies depending on the age, style, fixtures and fittings of the property.

As Mr Fraser points out, newer or custom-built properties can cost far more than a traditional caravan.

He said: “We have different price points on our park.

“You can buy a pre-loved caravan on our site in Kent for £30,000 pounds, or you can buy a new lodge in Cornwall or the New Forest for ten times that.

“We’d always say when thinking about buying a holiday home, make sure you can afford it, because every year, people have to pay site fees.

“That site fee is in return for maintaining the park, and that enables them to keep their caravan on a piece of land.”

Even if you have picked a property within your price range, Mr Fraser recommends thinking seriously about whether this is a long-term purchase you want to make.

He explained: “Just think about it long term. We always say to people, it’s a big decision, and really think about it, we’d never want anyone to rush into making decisions and not think about it.

“Is it something that you want to do long term? There is no point owning it for one or two years and then deciding you don’t necessarily want to own it anymore.”

Decide whether or not you want a custom or fully furnished property

Some caravans and lodges, particularly new-builds, can be kitted out with specific upholstery, appliances of features.

Mr Fraser says, if this is something customers are hoping for, they should think about it in advance.

He said: “If you buy a lodge which comes fully furnished, there is an opportunity to customise the lodge if you give us enough notice.

“In other words, you can literally pick the furnishings, the layout, but it does take longer than if you just buy one off the shelf.”

Pick your location wisely

The location of your holiday home is not only important for personal holidays but can also be crucial to homeowners who are looking to rent out their property in the future.

Mr Fraser explained: “We try and recommend people buy relatively close to where they live so that they can get the most out of it.

“That’s typically a two to three-hour radius. Cornwall is a little different because not many people live in Cornwall.

“For the New Forest, for example, there’s no point buying it and then hardly using it yourself.”

He added: “Generally people need to think about if they want to be closer to the beach or they happy to be inland. If they are inland are there nice pubs nearby or are you close to shops swell so that you’re not too isolated?”

Be prepared to wait

Given demand is sky-rocketing for properties, Mr Fraser says people need to be prepared to wait.

Some of the most popular parks currently have no availability, while those seeking new-build or customised properties will have to sit tight until their holiday home has been created.

He explained: “Because the demand is so high, we always say to customers you might have to wait for your caravan to arrive because the manufacturer is under real pressure to cope with demand.

“We ourselves, on some of our parks are waiting for some of our holiday homes to arrive, so just be patient.”

By AIMEE ROBINSON

Source: Express

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Holiday let incorporations hit a record high during staycation boom

As the holiday let sector goes from strength to strength, there has been a spike in the number of new holiday let companies being set up. What are the benefits of incorporating?

In recent months, there has been surging demand and high returns for holiday-let investments. Currently, appetite for staycations across the UK is stronger than ever before. More investors are entering the short-term rental sector or growing their investment in the field. At the same time, the number of holiday let incorporations has increased too.

During the first six months of 2021, there were 1,404 new holiday incorporations in England, Wales and Scotland. This is the highest figure since records began back in 2007, according to research by estate agency Hamptons. It’s also 83% growth on the number of holiday let incorporations in 2020. And it’s even 119% more than in 2019.

In the past year, the number of companies set up to hold buy-to-let properties has also increased. The sector continues to professionalise and adapt to tax changes. This includes changes to mortgage interest tax relief. However, despite this, buy-to-let incorporations is growing at only half of the rate of holiday lets.

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Benefits of incorporating

A property that qualifies as a furnished holiday let is considered a trading business. Because of that, there is no limit to the amount of mortgage interest the owner can offset against profits. This provides tax benefits whether investors incorporate or not.

Instead, the benefits of incorporating a short-term holiday let is predominately the fact that the owner pays corporation tax instead of income tax. Currently, corporation tax is 19%. And income tax can be up to 45%.

This makes incorporating particularly advantageous for higher-rate taxpayers. While sometimes investors can face limitations with how to withdraw money from a company, there is a dividend allowance every year.

Additionally, if a limited company is then sold to another investor, stamp duty is only 0.5%. Incorporating a holiday home can also help with inheritance tax planning.

Overall, incorporating a holiday let can be an important stepping stone to building a holiday let business. Holding your portfolio in one limited company means you can then use the profits from one property to buy another.

What to consider

Hamptons research shows that 93% of active holiday let companies have only one mortgaged property. For buy-to-let companies, this figure is much lower at 45%. There is often debate whether it’s better for investors to purchase property as an individual or limited company. It really depends on your specific situation and investment strategy.

There are pros and cons for incorporating. Tax advantages have often been big draws for investors. However, mortgage rates are usually higher for limited companies than individuals. A limited company structure can also create extra admin tasks.

It’s important to weight up the obligations and costs with any tax benefits and savings. Seek out professional advice to help you decide if starting a limited company is right for you. For further information, we can put you in touch with an independent tax expert.

By Kaylene Isherwood

Source: Buy Association

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Staycation boom prompts investment from UK holiday let owners

The UK staycation boom has seen more than nine out of ten holiday accommodation owners invest in their business during the pandemic.

Around 94% of hotel or cottage owners say they have made major upgrades to their properties since the government imposed a series of foreign travel restrictions following the beginning of the health crisis last March, according to data.

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The mutual says 55% of owners say they have carried out renovations, 45% have launched new services and 34% have put in new IT systems.

It added that 52% of these owners funded their investment from savings or an equity contribution, 41% used a business loan, 26% used insurance, 21% used external equity, 17% took up government-backed Coronavirus business interruption loan schemes or bounce back loan scheme loans, while 15% sought a remortgage.

Scott McKerracher says: “It is very clear from our consumer research that a UK holiday is by far and away the main choice for British consumers this summer and it seems that many UK accommodation owners have decided to invest in their businesses not only for the short term but also to make long-lasting positive change.”

James Wilkinson, who owns a ten-bedroom hotel in the Lake District called the Three Shires Inn, says: “We have found that this year, people are, on the whole, looking for more comfort and luxury with a growing demand for larger bedrooms.

“Like many UK accommodation owners, we have taken the time over lockdown to make long-lasting improvements to our property to meet the anticipated needs of consumers.

“For example, we had one suite before the pandemic, but we’ve developed two more of our bedrooms into suites recently, because that is where the demand lies among visitors, and because of course, these rooms generate higher revenues for us.”

Wilkinson adds: “We’ve found that the pandemic has slightly changed people’s perceptions of what they want.

“There isn’t as much concern about any extra costs involved, but a real requirement for relaxation and comfort.

“Developing the two new bedroom suites in our property was a significant investment for us, but we could see that that is the way the market is going.

“And because of the extensive lockdown, we had time to make these changes to the bricks and mortar of our business.”

The mutual’s survey found 38% of holidaymakers said they would pay more for a hotel, B&B or holiday let which has a Covid-19 deep cleaning service, while 31% would pay more for a property with clear instructions on its Covid-19 guidance.

Grant Seaton says: “The level of investment to which businesses are committing demonstrates optimism and resilience during a very challenging time and will hopefully be rewarded as consumer confidence and demand to holidaying in the UK continues to grow.”

By Roger Baird

Source: Mortgage Finance Gazette

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Surging demand and high returns for UK short-term holiday-let investments

Short-term holiday lets are continuing to see a boom with the rise in UK staycations. Where are the best locations for holiday-let investments?

As there is still ongoing confusion revolving around international travel, the appetite for UK staycations is stronger than ever. And this summer is especially busy with a surging number of bookings.

A survey by Sykes Holiday Cottages revealed 60% of respondents suggested they will remain in the UK for the main summer break this year. After analysing booking figures, revenue data and consumer research, Sykes also highlighted a 40% uplift in holiday-let bookings throughout the summer 2021 school holidays when compared to 2019 figures.

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Strong returns for short-term holiday lets

Prior to the pandemic, holiday-let owners that let their property through Sykes earned an average annual income of £21,000. This is expected to increase dramatically with the rise in bookings.

Holiday-let owners are forecast to earn an average income of £9,500 throughout July and August this year. This is a whopping 56% rise on the average summer income from the same period in 2019.

With the potential to earn more, new investor enquiries for short-term holiday lets have more than doubled in 2021 compared to two years ago. Second homeowners and investors are seeing the benefits of holiday-let investments.

Graham Donoghue, CEO of Sykes Holiday Cottages, says: “The entire travel industry has undergone tremendous changes and disruptions over the past year, but the UK staycation market has fought back, with the appetite for holidays at home now stronger than ever.

“A stronger UK staycation market will likely remain a fixture for years to come, meaning the long-term revenue opportunities for those considering entering the market now could be substantial.”

Top locations to invest in holiday lets

Location is key with any property investment but especially with short-term holiday lets. Finding sought-after locations can help investors earn strong returns.

Currently, demand for holidays in and near national parks is particularly high. Recent research suggests that national parks in the UK could have an excess of 100m visitors this year. This is providing opportunities for investors looking to buy their first holiday let or to expand their portfolio.

Analysis by Sykes Holiday Cottages revealed the Peak District is the fastest-growing holiday hotspot this summer. It’s also the most lucrative destination for holiday-let investors with an average annual revenue of £27,000.

Cumbria and the Heart of England follow closely with an average annual income of £26,000 and £25,000 respectively. Both are high up on the list of top destinations for holiday bookings this summer as well.

Additional research by mortgage broker Norton Finance revealed Snowdonia National Park and the Lake District as the top investment opportunities. The broker created a formula, which combined property prices, average monthly rental prices, gross rental yields and Google search data.

Featuring glacial lakes, rugged mountains and peaks and strong literary connections, the Lake District in Cumbria is seeing the highest average monthly search volume with 368,000. Demand is expected to remain high for short-term rentals in the Lake District in the coming months and years.

By Kaylene Isherwood

Source: Buy Association

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Number of UK Second Homes Climbs to 495,000

The number of second homes in the UK has risen by 30% over the last five years, to a record high of 495,000 in 2018/19, up from 382,000 in 2013/14, shows an analysis of the latest available MHCLG data by Houst. 451,000 of the 495,000, or 91%, of those second homes are located in England.

Houst co-founder and chief commercial officer Tom Jones said: “The likes of Airbnb and other platforms have revolutionised second home ownership and have certainly been one of the main driving forces behind second home ownership. Owners are now able to generate income from their second home extremely easily, almost all year round.”

He added that rising incomes, property’s continued draw as an asset class due to steadily rising house prices, and the shift to more flexible and remote working, are likely to have been the main reasons behind the rise in second home ownership over the period. The rise could also have been driven in part by the reduced value of the pound, making it more cost-effective to purchase property in the UK rather than in Europe, for example, that acts primarily as a holiday home.

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Houst also explains that the last decade has seen a boom in the use of technology-driven property lettings companies that have made it more attractive and far easier for second home owners to generate income from second residences.

He said: “One of the things, however, that second home owners still struggle with is the administration behind second homes. With staycations on the rise – even pre-pandemic – it’s almost like a second full-time job. Owners are constantly checking emails and enquiries from all the different platforms, ensuring the property is clean and ready for renters, and always looking ahead for opportunities to let out their properties.”

Houst says that the coronavirus pandemic, the time period of which the latest data from the MHCLG does not cover, presents some interesting questions for the future of second home ownership in the UK.

Jones added: “The restrictions on travel over the past year will have seen many second home owners debate the next steps for their second homes. Those that decide to continue letting properties – rather than selling or moving into them on a more permanent basis – will need to ensure they’re squeezing every pound out of their property.”

BY PETE CARVILL

Source: Property Wire

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