Richard Tugwell

Opportunities for UK holiday let investors

The recent fall in sterling could be powering a growing trend among Brits to enjoy short ‘staycations’, rather than jetting off to the continent for a weekend break.

This hasn’t escaped the notice of some savvy property investors, who are making the most of snapping up holiday properties.

Driven by ‘the Airbnb effect’ and recent pleasant weather, domestic trips are up over 4% to 58.5 million, according to new research. And not only are we taking more UK trips, but we’re spend more when we do: expenditure is estimated to have risen by 6.2% to £14.1bn. 

Fergal McGivney, senior travel analyst at Mintel – which produced the British Lifestyles report – has predicted a “slight reduction in the growth of overseas trips as some consumers opt for staycations” this year, because of stagnant wage growth and continued uncertainty around Brexit. 

This is all good news for brokers whose customers are looking to invest in holiday lets. The higher per-night rates that clients can achieve through hiring out holiday homes on a short-term basis can offset the added expenses, such as regular cleaning and managing agents’ fees. And, even with these factored in, investors can achieve impressive yields.

Here at Together, we’re speaking to landlords who are turning away from the traditional buy-to-let market and towards these holiday lets, and we’re happy to provide holiday let finance on both a first and second charge basis – whether borrowers are buying or remortgaging – at up to 65% LTV.

We continue to consider lending to borrowers securing against non-standard properties and to a broad range of customers, including limited companies, sole traders, freelancers and other self-employed people, expats or those with a less-than-perfect credit history. 

It’s apparent that the dramatic changes to the buy-to-let landscape over recent years are encouraging investors to evolve their businesses, and this interest in holiday lets may offer opportunities for brokers whose clients are looking to tap in to the UK’s tourism boom.

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