11/07/2020
Holiday lets – A more profitable alternative to BTL?
Reductions in the hospitality sector, travel bans, limited air travel and, indeed, fear of catching the virus itself will severely limit UK citizens’ desire to travel abroad.
Considering the continued unpredictability around overseas travel, there is strong evidence to suggest that UK holidaymakers will look to stay closer to home this summer and beyond.
Prime opportunity
We have experienced a noticeable surge in holiday let inquiries since the pandemic began. At a time where people wish to minimise contact with others and journey to more remote parts of the country, this is a prime opportunity for the holiday let market.
In fact, Holiday-lets had risen in popularity even before the pandemic hit. Increased taxation and regulation around buy-to-lets had led buyers to transfer their attention to holiday-lets for alternative sources of income.
Additionally, the popularity of websites such as Airbnb & Travelnest have increasingly led to a global demand for self-catered accommodation.
Rise of staycations
A survey from Lastminute.com showed that 33 per cent of British people intended to remain in the country this summer. Depending on how long the pandemic continues, there is evidence to suggest this could be part of a far longer trend.
The lack of opportunity for a foreign holiday has led Brits to consider the wealth of vacation opportunities within the UK.
Lastminute.com has said the hotel booking trends showed a 45 per cent week-on-week increase for the UK and particularly for London, Manchester, Blackpool and Bristol during summer and autumn.
The fact that booking interest extends beyond the summer suggests the staycation trend will not be confined to the warmer months.
Another site has reported a significant increase in holiday lodge bookings for the summer with its Norfolk Broads bookings up 28 per cent year-on-year, a trend likely to increase even further as a result of the pandemic.
Indeed, in mid-June it said internet searches for lodges in Norfolk had increased by 21 per cent and in Suffolk by 30 per cent since the government eased certain restrictions.
Holiday lets, a more profitable option?
The Holiday Lets we are arranging are creating a net yield to the owners that far exceeds the traditional BTL alternatives, even net of agents costs and other allowable expenses.
The accounting and taxation for furnished holiday lets is not the same as regular BTL property and may prove favourable in many cases.
Then there are also the lifestyle benefits. The ability for the owner to use the property for personal use for a number of weeks per annum meaning that not only do you get to check the property, you also gain a well-earned break.
