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UK demand for rental home mortgages surges amid domestic holiday boom

The boom in domestic holidays has fuelled a surge in demand for mortgages for UK holiday rental homes as landlords and investors cash in on people taking breaks in Britain.

The number of holiday let mortgage deals on the market has more than doubled in a year, according to the financial data provider Moneyfacts – reflecting what one mortgage broker said had been “really incredible interest” this year.

Its findings coincided with an analysis of government figures by the real estate adviser firm Altus Group that showed more than 11,000 second home owners in England had “flipped” their properties to become holiday lets since the start of the pandemic in order to capitalise on the booming market.

Holiday let mortgages are a type of buy-to-let home loan, and those taking them out include landlords who previously let their properties to traditional tenants, and investors buying a holiday home that they can rent out when they are not there.

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With rents for UK holiday accommodation rising sharply over the past few months after the pandemic ruled out overseas travel for many, some landlords in popular seaside destinations such as Cornwall have been favouring holidaymakers over long-term tenants.

This has created what some have described as a coastal housing crisis and there is speculation that the government is planning a range of changes to clamp down on second homes, including giving councils the power to ban them.

Moneyfacts said there were 186 holiday let mortgage deals available this month, compared with 74 in August 2020. Meanwhile, many more lenders have entered the market, with 25 now vying for business, up from 14 in August last year. These mortgages are mainly offered by smaller and specialist lenders such as building societies.

Rachel Springall, a spokeswoman for Moneyfacts, said: “As the demand for staycations remains evident, it would not be too surprising to see more growth in this market in the months to come.”

Chris Sykes said there had been strong demand this year for holiday let mortgages. “Everyone’s gone to [places like] Cornwall or Norfolk or Scotland or Cumbria on holiday this year,” he said, and landlords were “wanting to capitalise on that”.

The trend has been fuelled by many buy-to-let landlords looking to diversify in response to regulatory and tax changes that have in some cases hit profits.

By Rupert Jones

Source: The Guardian

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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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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.”


Source: Property Wire

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