1 in 5 people thinking about buying a holiday let property

1 in 5 people thinking about buying a holiday let property
Nearly one in five UK adults (17%) thought about buying a holiday let property during the pandemic, according to research carried out by Suffolk Building Society. Data from the building society shows that both the volume of, and total value of, completions for new holiday let purchases doubled between 2020 and 2021.

Charlotte Grimshaw, head of mortgages at Suffolk Building Society, said: “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.”

Those aged between 18-34 were most likely to have considered buying a holiday let property in the past couple of years, with the highest number of prospective landlords living closest to London.

Topping the wish-list for prospective landlords is a property that is in or near beautiful scenery, or one that is near the beach or coast. Devon and Cornwall were the locations most in demand by potential holiday let purchasers, followed by the Lake District, Peak District and Yorkshire Dales.

More than one in four potential landlords (28%) said they wanted a holiday let property that can be easily managed and requires minimal upkeep, whilst a similar number (27%) said they wanted to buy in an area they personally know or love.

Pros and cons for holiday let landlords

If you’re considering purchasing a holiday property to let out, make sure you understand exactly what’s involved first.

One of the main advantages of owning a holiday let property is that your rental income, especially during peak holiday seasons, is usually much higher than the rent you can get if you’re letting out a normal rental property. A property can only be classified as a holiday let if it’s available to be let out as furnished holiday accommodation for at least 210 days per year.

There can also be tax advantages to owning a holiday let property as opposed to a standard Buy to Let home. This is because furnished holiday lets can benefit from tax relief on mortgage interest. With a standard Buy to Let mortgage, tax relief on mortgage interest has gradually been reduced, so it is now only available at the basic rate of tax.

Mortgages for holiday let homes are not the same as Buy to Let mortgages, as you’ll usually be letting out your property for shorter periods than you would if you owned a standard rental property. Lenders will typically base the amount they are prepared to lend you on a projection of the amount of income you’re likely to bring in over the year, rather than a multiple of rental income. You’ll also need to consider how you’ll be able to cover mortgage costs during those periods when the property isn’t let out.

Bear in mind too that there can be other costs that will apply to holiday homes, as properties will need to be marketed to the right target market and maintained and cleaned each time someone stays, which could require an agent’s services.

Lenders may also have restrictions on certain types of property, such as holiday parks, so it’s important to get advice on the specific circumstances to be sure that the mortgage and criteria will match up.

Call our expert
advisers now
Call free from mobile or landline
Open 7 days a week