Why Should I Buy a UK Based Holiday Let?

Regardless of whether you’ve always dreamed of owning your own holiday let or you find yourself with a tempting new business idea, making the move to buy is a decision not to be taken lightly. Have you done your market research, do you have your finances in order and are you prepared for the amount of work required to run a successful furnished holiday let?

If you’re questioning whether or not to take the big leap into letting, here are some things to think about…

Is it the right time?

If you’re all set up financially, then yes! While holidays abroad used to be considered the ultimate luxury, times are changing and the UK’s holiday letting industry has never been so popular.

Something that was apparent before the pandemic and even more so since Covid hit, more and more people are opting for staycations. If you consider that holidays on home soil are less hassle to organise, have all the potential to be cheaper, and the fact that there are endless attractive holiday homes out there, it’s no surprise!

Personal perks

You might be thinking with your business head, but let’s not forget that there are great personal gains if you own a second home. If you fancy planning a getaway, it couldn’t be easier – or cheaper – as you have accommodation ready for your arrival (so long as it’s free of occupants for spells during the year). Plus, it’s likely that you’ve chosen to buy a property which is exactly to your taste, pleasing you aesthetically and in a location that you love… win, win!

Financial gains

The financial burden is undisputedly the biggest issue and possible risk when it comes to investing in property. You’ll need to really do your research into the market to ensure that you buy a place which has the very best potential to succeed; impulse purchases are an absolute no!

The good news is, it’s a good time to buy. As mentioned above, the industry has never been so popular and there’ll be plenty of people across the country searching the internet for ‘UK holiday lets’. That being said, you still need to know that you can make people interested in your holiday home over all the others. After all, the downside of a saturated market is the competition! It’s essential that your property is going to offer as good a staycation, if not better, than its rivals, or else you’ll find yourself with a dwindling bank balance and struggling business.

You’ll be happy to hear that should you buy a holiday let, you will be able to reap various tax benefits. This includes potential savings on your income tax as well as a reduction on your council tax, while you will also be able to benefit from capital gains taxes.

Workload

You should be aware that to have a successful holiday home, you need to put the work in – before you buy, and once things are up and running. You’ll need to put a solid business plan together which encompasses everything from marketing and management to maintenance.

Remember that – so long as your holiday let is popular – you’ll have a high turnaround of guests, all of whom will require a property that’s professional cleaned and supplied with all the essentials such as toilet paper and clean linen. Don’t forget that you may also be called upon during antisocial hours should a problem arise. If these things sound like a big undertaking, it’s time to consider employing professional help from a holiday letting agency, housekeeper and so on.

How feasible is your plan?

You might think that you have a healthy deposit sitting in your bank account and a good credit history, so will get a holiday home mortgage without any trouble. Unfortunately, this isn’t always the case! There are far fewer mortgage providers who are willing to lend to holiday lets, so the application process isn’t always easy.

Even once you’ve found a potential lender, you’ll find that there are strict criteria to meet. This could include a minimum income requirement and proof of your projected rental income, something that should be provided by a professional.

What next?

If you’re still intrigued and looking for more information about buying a holiday home, you’re in the right place. HCM has expert understanding of the market and those mortgage providers who are willing to lend to holiday lets. For more information contact us or complete the following form for a free initial assessment.