Tips on how you can reduce water wastage in your home.
Jam-packed with award-winning beaches, acclaimed cultural and historical attractions, and 15 national parks (not to mention Brexit uncertainty), it’s no wonder more of us are holidaying at home rather than jetting off overseas.
Known as a ‘staycation’, savvy property owners are turning to holiday lets to capitalise on highly sought after holiday hotspots as well as to have a ‘home away from home’ for their own personal use.
The figures speak for themselves: during peak seasons (six weeks in the summer holiday, two weeks over December and other school breaks) rental prices can earn more than the remainder of the year; a three bedroom holiday cottage which sleeps five in Polperro, Cornwall costs £2,245 for seven nights in August – a decent yield – compared to £561 in February.
If you’re considering investing in a property and are looking for an alternative to a residential buy-to-let, a UK-based holiday let could be the answer.
What should you know about holiday buy-to-let?
Below, we have outlined four things you should know before you take the plunge:
A holiday home can also be a personal home
It is possible to use your holiday home not just as investment, but also as a place to use as your own. However, not all lenders allow this as part of the mortgage agreement because many traditional buy-to-let properties have restrictions on how much of the year you can be in the home compared to how much it is rented out for a commercial purpose.
Our holiday-let mortgage product lets you purchase, remortgage or borrow additional funds where the property is let on a holiday basis for some or all of the year. This gives you the flexibility to use the property when you want to.
Plan for surprise maintenance costs
You need to set aside funds for required maintenance. This doesn’t just include ensuring the fixtures, fittings and furnishings are of a high standard, but also activities, such as advertising your property and the cost of cleaning between guests.
If you live far away from your holiday let, you may want to consider appointing a local letting agent or a housekeeper to manage the property in your absence, especially during high turnover season. This too would incur a cost.
Don’t forget: as the owner you are responsible for paying council tax, building and contents insurance, TV licence, utilities; costs covered by the tenant in residential buy-to-lets.
The good news is that if your holiday let qualifies as Furnished Holiday Lettings (FHLs), you can claim ‘capital allowances’ to help cover costs. To find out further information about tax and capital allowances, visit the government website. Alternatively, speak to an independent financial adviser.
Holidaymakers have different needs to permanent tenants looking for a home. Therefore, the key is to make your property as desirable as possible by being in a sought after location; an important consideration if profit is your main driver.
Advertise quirks to entice holiday makers and make it accessible. For example, child and dog friendly accommodation can go a long way in driving more interest to your property as well as reliable WiFi and up to date mod cons.
It is important to remember a holiday let may be left empty for a period of time, especially if in a region which has quieter tourist months. This will affect your income. Have a cash buffer in place to help make the monthly mortgage repayments and any maintenance which may need to be undertaken.
Don’t assume you’re eligible for all buy-to-let mortgages on the market
Holiday-let is different to a standard buy-to-let; therefore, your choice of lender may be limited. However, the good news is holiday let specific mortgages have steadily increased over the past few years with building societies leading the charge.
Our holiday let mortgage product, for example, is ideal for those looking to invest in properties in England (excluding central London) and Wales. If you'd like to talk to us about a holiday let mortgage, pop into your local branch or contact us to arrange an appointment with one of our qualified mortgage advisers.
*all figures and data correct as of February 2019.
OUR MORTGAGE IS SECURED ON YOUR HOME. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.