UK Holiday Let Market for Property Investors

International travel remains heavily restricted for holiday travellers adding extra layers of complexity, cost, inconvenience, travel time and in some cases, isolation upon your return.

The introduction of the travel traffic light system requires 10-days isolation at home for countries classified as amber. Red list countries still remain off-limits for holiday makers, with only a small list of green category countries, some of which will not accept travellers from the UK anyway. For most people, travelling abroad is not an option, or, simply unappealing, creating a huge increase in UK residents holidaying in the UK. And why not, the UK has lots to offer, whether it’s a city break, or, a countryside retreat. Hotels across the UK are fully booked as a result of the increased demand.

The trend for holiday lettings has become extremely popular as they are an excellent alternative to staying in a hotel, with properties offering all of the home comforts and privacy that you simply cannot get by staying in a hotel and at a reasonable cost.

Buy-to-let landlords are capitalising on the UK holiday let market as they can generate returns of up to 27% in some locations.

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High Rental Returns from Property

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Buy-to-let landlords who own property in Liverpool could achieve rental yields for holiday lets of over 27% (Portico Host), compared to yields of 13.6% in the same area for traditional long-term rentals.

Out of the ten best performing locations for short-term holiday lets, the top eight have Liverpool post codes with returns of up to 27% and Manchester has yields of up to 15.1%.

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Tax Efficient Holiday Lettings

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Buy-to-let property used for holiday lettings offer significant tax advantages as they are classified by HMRC as a business as opposed to an investment.

Short-term holiday lettings offer higher returns than long-term lettings and greater tax efficiencies, making them an exceptional addition to your property portfolio.

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Management of Holiday Lettings

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Online services offering holiday lettings are now very well-known consumer brands.

The better known brands have evolved, making the process of letting out your property for short-term rentals quick, easy and safe, with various checks and measures in place.

As the market has become more popular, there are property management companies in well-known tourist areas who now specialise in the holiday lettings market, should you want to take a more of a hands-off approach. As there is a more regular turn-over of people staying in the property, the management costs are typically higher as the agent will arrange for the property to be cleaned, linen laundered, consumables replenished and any repairs.

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Short Term Lettings Mortgage Options

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Options for buy-to-let mortgages for holiday lets have historically been restricted with mortgage lenders favouring properties rented on traditional long-term assured shorthold tenancies (AST’s).

Mortgage options for properties used for holiday lets have increased by 45% over the past 6-months, opening up the holiday lettings market to more buy-to-let property investors.

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Buy-To-Let Holiday Lettings in Liverpool

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St Anne’s Gardens is in Liverpool, one of the best cities in the UK for holiday lettings, with prices from £86,000 and NET returns of 10% forecast. Click here for further information.

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