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How to become a holiday let landlord in the UK

The holiday let sector is big business as the UK’s tourism industry opens up, and it can offer a high-yielding alternative to traditional buy-to-let.

Recent research has found that as many as 10 million UK adults are considering becoming holiday let landlords, or toyed with the idea during the pandemic. Holidays are just one of the lifestyle changes brought about by lockdowns and travel restrictions, but they could be a permanent shift for some.

The survey by Suffolk Building Society found that, of the one in five adults (17%) who thought owning a short-term let or holiday rental was a good idea, younger people aged 18-34 were leading the trend.

According to the building society’s records, the volume and total value of completions for new holiday let sales doubled between 2020 and 2021, as both existing and new landlords entered the fold to offer thousands of staycationers more choice of accommodation.

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Is a holiday let a long-term option?

People’s behaviours and preferences have changed, sometimes drastically, over the course of the pandemic. Where holidays are concerned, international travel hasn’t been possible, and it’s opened up the idea of ‘staycations‘ to more people than ever.

As travel overseas becomes easier, some expect the number of people taking holidays in the UK to fall. However, like the working from home trend, the change was already taking place pre-pandemic, with many opting to stay local for cost or environmental reasons, for example.

Matt Kelly points out that the holiday let option was steadily increasing in appeal for landlords even before Covid hit. For some, they were becoming the preferred option over long-term rental homes.

“This is a trend we expect to continue, and we expect the holiday let market to remain stable in the years to come. However, there will discounts out there which may be worth considering, particularly if investors are looking to purchase out of season.

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“Buyers may be able to get an even better deal by finding a property which is in a poorer condition and needs restorative or structural work. Holiday lets located in seaside towns, for example, tend to be more susceptible to damage caused by floods, salt air corrosion, storms and rotting wood.

“That means they often come with higher maintenance and repair costs, so anyone hoping to scoop a post-pandemic bargain by investing in a doer-upper would be wise to measure the upfront cost against the yearly upkeep.”

However, he points out that for those looking to make the most of the upcoming high season, a ready-made property would provide returns much more quickly.

How to get a mortgage

Due to the growth in the sector, rising numbers of lenders have entered the field, and the number of products available has increased. The heightened competition has held down mortgage rates, which is good news for those looking to borrow to invest.

Matt Kelly adds: “However, for more unusual properties such as a fisherman’s cottage, getting a traditional loan may be a bit trickier.

“Unlike many mainstream mortgage providers, specialist lenders have flexible criteria and can look into a customer’s background, their chosen property, financial position and other factors, to fully assess their position before making a lending decision.”

Charlotte Grimshaw comments: “It’s easy to understand why the idea of owning a holiday let home is so attractive. As people were limited to holidaying in the UK, often within an area they know and love, their eyes were opened to the opportunity of increasing their income, as well as enjoying a property for personal use too.

“Our advice to anyone considering this route, would be to ensure you understand the criteria that mortgage lenders will be looking for as it can be quite different to a standard residential mortgage application, or even a standard buy to let mortgage too.”

Benefits of holiday lets

Many people are attracted to short-term lets due to the higher rental yields they can offer compared to a traditional buy-to-let. This has been heightened for some by things like landlord licensing costs and the reduction in mortgage interest tax relief.

There are certain tax advantages to owning a holiday let, too. They are classed by HMRC as a business rather than an investment, so owning a furnished holiday cottage can be extremely lucrative.

By Eleanor Harvey

Source: Buy Association

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A holiday let is for life not just for the pandemic, warns lender

Research by Suffolk Building Society has revealed nearly one in five UK adults contemplated buying a holiday let property during the pandemic, when overseas travel become restricted.

The mortgage lender said it had seen the number of completions on holiday-let purchase double between 2020 and 2021.

It appears to be the younger generations driving this trend, with those aged 18 to 34 being the most likely to have considered a holiday let property in the last 24 months.

But whilst it may seem a tempting market to enter, the building society is concerned many budding investors are jumping in without any previous experience or knowledge and this could pose a risk.

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Charlotte Grimshaw of Suffolk Building Society said new investors to this market should be aware of certain rules lender put in place on holiday lets which may restrict their ability to take out a mortgage.

She said: “It will be important to check they have realistic expectations, with many lenders’ criteria including minimum ages and a requirement to already be a homeowner. Brokers can play an important role here in helping prospective short-term landlords assess their options.”

She said those interested in holiday lets should first try their hand at buy-to-let as a way of gaining additional income and experience with longer-term tenants before branching out into the holiday market.


Charlotte also warned not all lenders would allow the buyer to market their property on short-term lettings sites such as Airbnb and Vrbo. And she said properties in holiday parks, caravans or lodges, and those of unusual construction method may not always be accepted by lenders.

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“It’s easy to understand why the idea of owning a holiday let home is so attractive,” she added. “As people were limited to holidaying in the UK, often within an area they know and love, their eyes were opened to the opportunity of increasing their income, as well as enjoying a property for personal use too.

“However, intermediaries should also advise their clients to take the time to understand the market and check out the competition before falling in love with a property that isn’t viable in terms of lettings.”

The survey revealed, of those who expressed their interest in becoming a holiday let landlord, almost a third, (32%) said Covid-related restrictions inspired them to look into holiday lets, however, half (50%) claimed it was always part of their plan.

Devon and Cornwall were the locations that most wannabee holiday let landlords were considering, followed by the Lake District, Peak District and Yorkshire Dales.

By Kate Saines

Source: What Mortgage

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Staycation: UK’s best stately homes named – including gorgeous royal favourite

The UK has many incredible stately homes. With gorgeous grounds to explore and a glimpse of luxury, they’re the perfect attraction for a day trip on a UK staycation.

New research from has named British people’s favourite stately homes.

The holiday company surveyed British people across the nation to find the most popular stately home.

The winning stately home was the incredible Chatsworth House in Derbyshire, chosen by 23 percent of those surveyed.

Chatsworth House is a highlight of any trip to the Peak District and offers a wide range of activities.

The gorgeous house and grounds have featured in Pride and Prejudice, Peaky Blinders and The Duchess.

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Currently closed, Chatsworth House will reopen for visitors on March 26 although shops are still open.

In April, the stately home will host 12 incredible sculptures as part of an interesting collaboration with Burning Man.

The UK’s second favourite stately home was Windsor Castle, which was chosen by 22 percent of Britons.

A royal sanctuary, Queen Elizabeth has reportedly decided to make the castle her permanent home.

The monarch used to travel to the beautiful 11th century castle on weekends. It is the world’s oldest and largest inhabited castle.

British tourists who want to visit Windsor Castle this year could travel to see a special Coronation exhibition.

The exhibition will run from July 7 to September 26 as part of celebrations for The Queen’s Platinum Jubilee.

In third place was Blenheim Palace in Oxfordshire which was voted for by 19 percent of those surveyed.

The Oxfordshire estate was the birthplace of Winston Churchill and has 12,000 acres of land.

A family favourite, visitors can enjoy the two mile Marlborough Maze or the Palace’s miniature train.

Kensington Palace in London took fourth place and was 17 percent of Britons’ favourite stately home.

The Palace is home to the Duke and Duchess of Cambridge and has glorious gardens and elaborate decor.

Longleat House in Wiltshire was the fifth favourite stately home and was voted for by 16 percent of Britons.

Renowned for its incredible drive through safari, Longleat has been occupied by 15 generations of the same family.

Alnwick Castle in Northumberland was chosen by 15 percent of those surveyed and is famous as the filming location of Harry Potter.

Some of the UK’s best stately homes have incredible grounds, perfect for a summer day out. 

UK’s favourite stately homes (

  1. Chatsworth House
  2. Windsor Castle
  3. Blenheim Palace
  4. Kensington Palace
  5. Longleat House
  6. Alnwick Castle


Source: Express

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Dorset is top-earning county for holiday homes

DORSET was the top-earning region for holiday homes in 2021, a holiday lets company has said.

Based on the average income figures for a four-bedroom holiday let, holiday home owners in Dorset earned £36,000 last year – up 50 per cent from 2019, according to new figures published by Sykes Holiday Cottages.

It follows an uplift in demand for UK holiday ‘staycation’ accommodation throughout the pandemic.

Meanwhile the nationwide average income for holiday let owners in 2021 was £28,000 – up 33 per cent from 2019.

Last year, bookings to Sykes’ holiday accommodation throughout Dorset increased, with many Brits shunning foreign holidays due to travel restrictions and ongoing uncertainty.

The Cotswolds and Peak District took second and third place, with holiday home owners earning on average £35,000 and £34,000 in 2021, respectively. Devon and Somerset rounded out the top five.

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Bev Dumbleton, chief operating officer at Sykes Holiday Cottages, said: “2021 was certainly the year of the staycation and we saw the strong demand for accommodation across Dorset culminate in record bookings and a significant boost in average yearly income for our owners.

“With the interest in holidays closer to home likely to remain a fixture for years to come, those considering investing in a holiday home in 2022 could see great success – particularly if they choose a location like Dorset which has proven fruitful for those already in the market.

Top-earning regions for holiday homes in 2021 – based on the average annual income of a four-bedroom property, as the median property size.

  1. Dorset – £35,864
  2. The Cotswolds – £35,027
  3. Peak District – £33,833
  4. Devon – £33,071
  5. Somerset – £32,708

Regions with the highest occupancy rates in 2021:

  1. Cumbria & the Lake District – 80.2%
  2. Northumberland – 80.1%
  3. Peak District – 78.6%
  4. Southern Scotland – 78.6%
  5. North York Moors – 78.4%


Source: Dorset Echo

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Shropshire is a staycation surprise with lovely walks, great cafes and character pubs

Shropshire is a bit off the radar but it’s every bit as impressive as the more famous Lake District or Yorkshire Dales and far less crowded for an enjoyable break.

“Where exactly is Shropshire?” was the blanket response I got when telling people about my staycation. Their reactions surprised me, although I have to admit I knew little about the county other than its vague geography.

With Wales to the west and Birmingham about an hour’s drive east, it’s not like Shropshire is in the middle of nowhere.

It hasn’t got its name in lights like the Lake District or the Yorkshire Dales but, as I found, it doesn’t mean it’s any less impressive.

Driving through the undulating hills of the Shropshire countryside, I was taken aback at how stunning the landscape is. Why don’t more people talk about this place, I wondered.

But secretly I was glad it’s a bit off the radar. It meant we weren’t fighting through crowds like in some of the better known tourist areas.

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On one walk – a 6.8-mile trek to Linley Beeches – we didn’t see a single person. Just a few cows and sheep for company. That ramble took us to a mile-long double row of ancient beech trees at Linley Hill, standing to attention like a line of soldiers. These are some of the county’s most iconic treescapes.

Shropshire is a walker’s paradise so off we went – me, my husband Ben and our six-month-old Asa strapped to him.

Next we tackled Caer Caradoc hill. A word of advice – don’t let the word “hill” fool you. It felt like a mountain in places for us novice ramblers.

Caer Caradoc overlooks the market town of Church Stretton which has an abundance of cafes, antique shops and independent traders. If walking up hills isn’t your thing you can enjoy pounding the pavements here instead.

As soon as you enter Berry’s – an award-winning coffee house set within the ground floor of a Queen Anne townhouse – you’re met by a counter of delicious looking cakes. But I ordered scrambled eggs and smoked salmon to power me up those hills.

This area is an excellent base for holidaymakers, especially hikers, horse riders, mountain bikers and nature-lovers.

Our home-from-home for the week was The Dovecote, built over an 18th century coach house, and booked through Sykes Cottages, just down the road in the village of Wistanstow.

Surrounded by the fields of the Shropshire Hills, an Area of Outstanding Natural Beauty, it offers the ultimate setting for a romantic retreat for two (plus baby).

After upping our step count, the welcoming cottage also provided the perfect antidote – a hot tub.

Inside is an open-plan living space. With high ceilings and a magnificent inglenook fireplace with woodburning stove, it’s the ideal space to relax.

Contemporary furnishings perfectly complement the character and charm of the property’s exposed brickwork and original beams. Sympathetically restored, all of the ironwork in the cottage is either original or handmade by the local blacksmith.

On the first floor is a chic master bedroom with king-size bed and roll-top bath with handheld shower, as well as an en-suite shower room.

Outside, a pretty garden surrounds the hot tub, which is where we spent every night with a glass of wine after putting the baby to bed.

Owners Julie and Wayne go the extra mile with thoughtful touches for their guests. We arrived to find a box of indulgent doughnuts waiting for us – just what we needed after a long drive – as well as a pint of milk.

They’d also set up a travel cot at the end of the bed for our little one.

When we prised ourselves out of the hot tub we explored more of the surrounding countryside, including the National Trust’s Long Mynd, with its stunning heather-clad plateau.

We also visited nearby Ludlow for the day. Only a 15-minute train ride or drive south, this thriving medieval market town has gorgeous architecture as well as Michelin star restaurants and its very own castle.

We enjoyed Sunday lunch at Ye Olde Bull Ring Tavern, a characterful pub dating back to the 14th century.

The town of Craven Arms was a two-mile walk away from our cottage and has a well-stocked country supermarket.

And within stumbling distance of our holiday home was the Plough Inn, just a five-minute stroll down the road.

But there was plenty to keep us occupied at The Dovecote, with a Smart TV with Freeview and access to Amazon and Netflix, as well as wi-fi and a Sonos music system.

A starter pack for the woodburning stove was provided and a pizza oven is available on request.

So now I’ve told you all about the delights of secret Shropshire, do pass it on. But maybe not to too many people…

By Janine Yaqoob

Source: Mirror

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Short-term lets could see another boom as more opt for staycations

Holiday accommodation in the UK is set for another popular summer, and those considering investing in the short-term lets sector could reap rewards.

A new report has revealed that there could be another rise in the number of holidaymakers opting for short-term lets – generally self-contained, self-catering accommodation – in the UK.

The research, by Mintel, showed that almost half (47%) of families looking at holidays were interested in a cottage or villa for future trips, rather than a hotel.

This compares with just 25% who have experienced this type of holiday in the past three years. It indicates a potential future rise in ‘staycationers’ looking for holiday homes.

It seems discovering a new place was a key driver for many choosing to stay local in their holiday options. Around 89% of people said this was what appealed to them.

Covid, of course, sparked a major increase in the number of people staying on UK turf for their holidays. More than a fifth (22%) of respondents said the pandemic had led them to discover a new part of the country.

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Short-term lets sales surge

A separate study, by Euromonitor, revealed that the sector has played a major role in the UK’s housing market recovery. It found that self-contained accommodation – including short-term rentals – was ahead of other sectors in the value of sales recovery last year.

Predictions for the year ahead are also hugely positive. The sector is forecast to hit 2019 levels in its sales values, reaching around £2.1bn in 2022.

Graham Donoghue, CEO of Sykes Holiday Cottages, commented: “A holiday doesn’t have to mean flying abroad or driving hundreds of miles. Our research shows that Brits are now much more open to exploring what lies closer to home.

“With beautiful countryside and award-winning beaches, the UK is a wonderful location for a staycation and it’s great to see that lots of people are planning to make the most of what the country has to offer.”

Why do people choose a staycation?

For anyone considering investing in short-term lets and holiday homes, knowing what drives demand could be key to success. Just as successful buy-to-let landlords often have a target tenant type in mind, and ensure their property caters to the tenant’s needs, the same is true for this sector.

In a survey by Sykes Holiday Cottages at the end of last year, more than half of respondents said “visiting lesser-known places makes them feel like they are getting the most out of the UK”. A similar figure (52%) cited exploring the local area as another reason to stay close to home.

A further 47% of people said local holidays enabled them to spend time with family and friends. A high number (40%) also said they would “go out of their way” to visit less popular areas.

Keeping your options open

Merilee Karr, chair of the STAA and CEO of UnderTheDoormat, points out that UK holidaymakers have a great sense of adventure, as they are happy to visit new areas as well as the tried and tested tourist hotspots like London and Bath. Some of these areas, she says, might have been undiscovered pre-Covid.

She adds: “More property owners are recognising the demand for places to stay that are in many cases off the conventional tourist routes. By making their properties or rooms in their homes available for short term rental whilst they are away, it is now possible for visitors to stay in those locations.

“Short-term rentals offer flexible types of accommodation from apartments and houses of all shapes and sizes in cities to cottages and large farmhouses to cope with larger groups of families or friends for a ‘home-from-home’ experience in rural areas.”

By Eleanor Harvey

Source: Buy Association

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Sussex named a top spring staycation destination for nature lovers and flower spotting

Looking for the perfect staycation location to enjoy the best of Spring’s floral displays? Look no further than Sussex because the county has nabbed itself a top 5 spot on HomeToGo’s spring flower spotting staycation list!

HomeToGo compiled this study by comparing the number of public gardens with early blooms on show, their variety of spring flowers, and the median price per night for a holiday home in the area which is at £49.83 in Sussex!

“We’re excited to release this guide to help staycationers find the perfect place in which to enjoy nature during the spring season,” says Eleanor Moody, UK Market Manager at HomeToGo. “The demand for domestic destinations remains strong in the UK market, with rural cottages reigning as an accommodation of choice for travellers opting to spend their holidays closer to home.”

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“Dog-friendly lettings are also particularly popular, with 38% of all searches in 2022 so far via using the ‘pets allowed’ filter. Holidaymakers travelling with their canine companions will be pleased to know that plenty of the gardens included in this study allow dogs on leads.”

Here are 6 great places to see Spring flowers in Sussex:

Arundel Castle

Where: Arundel Castle, Arundel, West Sussex BN18 9AB

What to look for: The fantastic Tulip festival in mid-April certainly is a sight to behold!

Sheffield Park and Garden

Where: Sheffield Park, Uckfield, East Sussex TN22 3QX

What to look for: Spring colour from camellias, daffodils, rhododendrons, bluebells and more

Pashley Manor Gardens

Where: Pashley Rd, Ticehurst, Wadhurst, East Sussex TN5 7HE

What to look for: Don’t miss the annual Tulip festival as over 48,000 tulips are expected to bloom this April!

Bates Green Garden

Where: Bates Green Farm, Polegate, East Sussex BN26 6SH

What to look for: The famous Arlington Bluebell Walk is unmissable

Standen House and Garden

Where: W Hoathly Rd, East Grinstead, West Sussex RH19 4NE

What to look for: rhododendrons, bluebells, tulips, early blooming roses and much more

Charleston Farmhouse

Where: Firle, West Firle, Lewes, East Sussex BN8 6LL

What to look for: Charleston Festival from 19th – 29th May – the lineup includes actor Benedict Cumberbatch and many more amazing speakers!

By Cate Crafter

Source: GBL

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UK Expat Holiday Let Hotspots as Holiday Let Mortgage Availability Triples

Holiday let mortgages continue to grow in availability with the number of mortgage deals available tripling since 2020, according to Moneyfacts. This figure is also up by a quarter since September 2021, showing the rapid growth that is still happening in this sector of the UK mortgage market. With this increase in the availability of holiday let mortgages, investor confidence is also growing with Hodge Bank reporting a rise of 173% in holiday let mortgage applications.

The growing numbers interested in UK holidays or ‘staycations’ are likely responsible for the rise in holiday let mortgage options as holiday let properties become increasingly popular among UK expat and foreign national investors responding to the surging demand for this type of let.

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Holiday Lets an Excellent Option for UK Expat and Foreign National Investors

‘One good reason to choose a holiday let over a more traditional buy-to-let property is that a holiday let could be more profitable than a long-term let’ says Stuart Marshall. ‘Holiday lets can command higher prices – so much so that a week of renting a holiday let can earn as much as a month of renting a long-term let. This means that the national average rental yield for a holiday let is predicted to rise to 14% by 2022. Meanwhile, the average rental yield for a long-term let is 4.77%, with even the highest current average rental yield standing at 6.92% (Newcastle). This puts in perspective just how profitable a holiday let can be when purchased using a UK expat or foreign national holiday let mortgage.’

‘Further, there are some great tax benefits to be had from a holiday let property. The most obvious of these is the ability to claim mortgage interest tax relief which is now denied to most landlords. Further, any running expenses (such as bills, maintenance costs and the replacement of furniture) can also be claimed as tax expenses and the property will often be eligible for business rates instead of council tax. Of course, the property must also satisfy some rules to reap the maximum benefits. For example, new rules surrounding holiday lets require the property to be rented out for a minimum of 70 days a year and available to let for 140 days a year in order to be eligible for small business rates relief. However, with the right property in the right area, this shouldn’t be hard to achieve.’

Holiday Let Hotspots in the UK

For UK expat and foreign national investors looking to invest with a UK holiday let mortgage, there is a wide range of choice available for where to buy. There were a number of holiday let hotspots where prices have jumped dramatically in the past 12 months and these areas will likely be areas on interest when it comes to consumer demand. Therefore, investors who buy in these areas increase their chances of reaping strong returns and making sure that their property is let for as many days as possible.

Amongst the most popular locations for UK holidaymakers and holiday let investors is Cornwall. Home to some of the most incredible landscapes in the UK, Cornwall is a constant draw for those looking for a staycation. Consequently, Cornwall is also an incredibly popular destination for investors utilising UK expat and foreign national holiday let mortgages.

Padstow has always been a popular town for UK holidaymakers, famous for its concentration of fantastic restaurants and as a retreat for those with second homes, which also contribute to the high prices in the area. Cornwall is, by far, one of the most expensive locations for investing using a holiday-let mortgage, with the average asking price in Padstow sitting at £658,588 according to Rightmove – a 20% increase in price in the last 12 months.

A slightly more affordable location to invest in using a UK expat or foreign national holiday let mortgage is St. Ives. St. Ives, like much of Cornwall, is home to some stunning beaches but has a uniquely stylish town to boast too. The average asking price in St. Ives is significantly lower than in Padstow –£473,161 compared to £658,588. While this is still expensive by the standards of many other holiday let hotspots and traditional buy-to-lets, there is a great variance in price. Though a two-bed cottage will often cost in the region of £450,000, flats often skew far cheaper with a one bed available for around £200,000.

Cheaper still is Newquay, where the average asking price has increased 13% in the last twelve months to £317,846. Newquay boasts 12 incredible beaches and a vibrant nightlife scene which is sure to appeal to tourists young and old. It’s also an incredibly popular spot for surf enthusiasts. Because of a massive boom in development, Newquay has great stock availability which contributes to the lower prices seen here compared to other areas in Cornwall.

According to data from Airdna, the average annual revenue for a holiday home in Cornwall is £33,594. Using this average along with the average asking prices for Padstow, St.Ives and Newquay, we can calculate annual rental yields of 5.1%, 7.1% and 10.6% respectively. Obviously, this amount will vary greatly depending on the type of property, the actual cost of the property, and the occupancy rate. However, using averages is a good way to estimate a guide figure for the rental yield.

North Yorkshire.
A far more affordable area than Cornwall is North Yorkshire, which has become an incredibly popular destination for staycations. One area that has seen astonishing growth in the last year is Whitby, where asking prices have increased by an astonishing 17%. This brings the average asking price of a property in Whitby to £254,218 – significantly lower than the Cornish competition. Despite this lower asking price, the typical average occupancy rate for a property in Whitby is 70% and average nightly rates are £128 a night. Using these figures gives us an average annual revenue of £32,704 which would put the average rental yield for Whitby at 12.9%.

Not far from Whitby is Filey, a fishing village home to a five mile stretch of sandy beach. Here, prices increased by 13% in the last year. However, the average asking price for a property in Filey is still far more affordable than much of the competition, making it incredibly accessible for those utilising the excellent UK expat and foreign national holiday let mortgage deals available at the moment.

With the popularity of holiday lets continuing to increase and properties getting booked up sometimes years in advance, holidaymakers are looking toward the hidden gems in the UK holiday market – and, at the current prices, Filey could well be the perfect hidden gem location.

Wales is another region that is home to excellent options for those using a UK expat and foreign national holiday let mortgage. Areas like Porthcawl have increased by 14% to an average asking price of £307,051. Using Airdna’s figures again, we can estimate the average rental yield for this area to be around 12.8%.

Pwllheli similarly increased in asking price by 13% but to a much lower figure of £222,607. This presents excellent investment opportunities for an area with the draw of two Blue Flag beaches, a marina, golf course and a sailing club. It is also incredibly close to Snowdonia National Park. Using the same source and calculation as the previous areas we have examined, this would give an average rental yield of 15.1%.

The strength of holiday lets in Wales is evident in the fact that Wales has seen the biggest regional increase in the number of holiday let companies that have been established in the last year – up by 131%.

By Ulysses

Source: Ein News

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Staycation Boom? Assessing The Holiday Let Investment Market

There is reported to have been a ‘staycation boom’ in the UK during the pandemic. This would make sense; after all, international travel has been fraught with additional complexity and cost, if not being rendered completely impossible for long periods over the past two years.

Indeed, it was recently reported that 39% of Britons would be more inclined to holiday in the UK post-pandemic. But the appetite for staycations was already well established before we had ever heard of Covid-19. A quick glance back to 2019 reveals that while 93 million Britons jetted overseas, whilst 123 million chose to holiday in the UK, suggesting that the ‘boom’ is simply an uptick in a stable domestic tourism industry – one that is worth over £1.6 trillion.

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The strength of this industry, which is expected to grow further, has naturally impacted the property investment sector. Namely, more investors – particularly buy-to-let investors – are now considering holiday lets as a means of diversifying their portfolios. For those who fall into this camp, it is important to first understand the suitability of investing in holiday lets, including both the potential pitfalls and benefits that such an investment entails.

Reasons to be wary
Profitability – landlords acquiring a new property that they intend to use as a holiday let are likely to have paid an inflated price. Location is a very important factor in the success of a holiday let, and increased tourism in the last two years have pushed property prices up in tourist hotspots. Further, many properties will need furnishing and renovation to qualify as a holiday let. So, an initial outlay is common before income from holidaymakers starts to filter through; this could pose a potential barrier to some investors.

Running costs – with the cost of cleaning, energy and maintenance falling under the landlord’s remit, the regular turnover of guests creates some significant outgoing costs that can limit the money made on a property. Investors should also be aware that letting agents can charge between 20-30%, a necessary cost if they would prefer not to carry out the day-to-day management of the property. All these costs will eat into an investor’s yield.

Lack of guests – unfortunately, the old adage ‘build it and they will come’ is not a guarantee in the holiday let market. Despite sites like Airbnb creating easier platforms to market holiday lets, it is unlikely that properties will ever be at full capacity all year round. As holiday lets must be let for a minimum of 105 days to earn their potential tax benefits (more on this below), failure to attract guests could be disastrous to a property’s profitability.

Threat of regulation – with London capping short-term lets to just 90 nights a year unless planning permission is acquired, regulation in the holiday let industry is likely to increase. Areas like Cornwall and Bournemouth have seen incidents of ‘over-tourism’, and local councils may bring further regulation in to compensate.

Difficulty in finding finance – the relative insecurity of short-term lets makes borrowing from high street lenders difficult. As such, landlords could look for alternative financial backers. In doing so, lenders who underwrite on a case-by-case basis are essential to securing the best deal. Despite high-interest rates, variable discount rates and large down payments, investors and their brokers could consider their financial options as they hunt for the property itself in order to secure a deal that is most beneficial to their needs.

The benefits to be had
Those are the challenges, of which there are plenty. But that ought not to overshadow the potential upsides – again, there are numerous.

As many experts suggest, investment in different markets can maximise returns as each asset will react differently to market fluctuations. While it certainly does not guarantee against loss, diversification can reduce risk. The potential benefits listed below reflect why many landlords regard holiday lets as an increasingly interesting way to diversify their portfolios.

Tax benefits – if a property qualifies as a Furnished Holiday Let (as defined by HMRC), landlords are able to claim Small Business Rate Relief, thus avoiding council tax or business rates on their property and increasing the potential for profit. Furthermore, landlords can offset energy, cleaning and maintenance bills against their profits, reducing their tax bill further. If they choose to sell, they can even claim some capital gains reliefs, increasing the value of a holiday let as an asset.

Yields – as a result of these tax reliefs, and a rental price increase of 41% since 2020, holiday lets can make 30% more yield than a BTL property. With most aiming for a return of 8% annually and an average profit target of 30% (rising to 50% on properties without mortgages and letting fees), holiday lets begin to look like a credible alternative to an established portfolio.

Holiday home – the potential benefit that might have intrigued landlords the most during the pandemic is the opportunity to use a holiday let as a personal holiday home. To qualify for tax reliefs, holiday lets must be available to let for at least 210 days leaving landlords 22 weeks a year to use it themselves if they choose. With restrictions on international travel and a working from home order in place, the option to travel to a second home for free makes a holiday let an even more intriguing alternative to landlords.

Final thoughts
As restrictions ease and international travel continues its revival, it will be fascinating to see whether staycations remain as prominent, both in the media and with holidaymakers. For landlords considering a holiday let, they should weigh up whether they are capable of navigating the various pitfalls of the market. Those who are successful could certainly start to reap the attractive benefits a holiday let has to offer.

By Paresh Raja

Source: Finance Monthly

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Half-term staycation bookings boom with record numbers planning UK breaks

More Britons than ever are looking to holiday at home during the upcoming half-term break with bookings soaring for UK destinations.

Figures from holiday home rental agency Sykes Holiday Cottages revealed bookings for February half-term are up 27% versus 2020, with the number of people booking staycations surpassing pre-pandemic levels.

Meanwhile, bookings so far this year are up 22% compared to the same point in 2020, while there has been a 158% increase in bookings compared to the same period last year.

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In particular, Britons are booking staycations in Whitby, Ambleside and Bowness-on-Windermere, with these three locations witnessing the greatest volume of bookings for 2022.

Meanwhile, in a survey of 1,000 UK guests, Sykes found that 55% of British holidaymakers say they will still opt for UK staycations even when all international travel restrictions have lifted.

On average Brits are planning to take two staycations in the next 12 months, with almost half (46%) saying limiting their environmental impact is a key consideration when choosing a UK break over foreign travel.

Other factors for opting to holiday closer to home include the ease and convenience (52%) and getting to enjoy the outdoors (72%).

Graham Donoghue, chief executive at Sykes Holiday Cottages, said: “Bookings for our holiday lets this year are through the roof, showing that the staycation boom is here to stay.

“While bookings for February half-term have been record-breaking, we expect Easter and summer to be no different, and bookings are already coming in for autumn and winter thick and fast.

“Brits are looking to make the most of what our beautiful country has to offer and the self-catered option still appears to be a popular choice as contact with others can be limited.

“Clearly environmental considerations are also playing a role in the decision to staycation too. This is something we were starting to observe before the pandemic but it has really taken off over the last two years.”

By Brett Gibbons

Source: Wales Online

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