According to specialist lender Hodge bank, holiday let mortgage enquiries grew over 170% between 2020 and 2021.
Another report from Sykes cottages, who have over 30 years of experience in the business, report that landlords of short term rentals properties enjoyed close to £28,00 in annual income in 2021, a 33% rise compared to 2019. Our very own East Anglia was in the top 3 fastest growing regions in 2021 for staycation properties.
COVID-19 meant that the majority of us were forced to stay at home for the best part of 12 months between 2020 and early 2021. When the world finally transitioned back to some form of normality, travelling abroad for a holiday didn’t seem as necessary for many people as it did before, it certainly wasn’t as easy, with many countries operating stringent policies to counter rising infections.
Whilst there were already many professional landlords with holiday properties in their portfolio, and a significant number expressing interest, this change in consumer behaviour has accelerated activity for many.
Lenders have recognised this growth and as such, more and more are offering holiday let products than ever before. This increase in products is a good thing for potential investors as the lenders are fighting for the business.
Remember this isn’t primarily a second home. It is a property purchased with the intention of renting it out to holidaymakers on a short-term basis.
To qualify for business rates relief, the following criteria must be met:
For furnished holiday lets, landlords should still be able to deduct mortgage interest payments from their rental income before paying tax. Energy and gardening amongst others costs can also be offset against the profit, bringing down a landlords tax bill. In comparison, a traditional buy to let no longer enjoys any mortgage interest relief.
In addition to the financial positives, many lenders also allow you to occupy the property yourself for a limited time per year.
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