Investing in a holiday let is about much more than simply earning an income from another property. It’s about owning another home in one of your favourite locations which you can escape to yourselves every once in a while, as well as renting it out to people who’ll appreciate it as much as you do.
But what exactly is a holiday let property and why would you want one?
How is holiday let different to buy to let?
Put simply, buy to let is where a property is let out to a tenant who’ll be living there for an extended period of time, treating it as their home. A holiday let is reserved for short-term stays, usually for no more than two or three weeks at a time, where the tenants will be staying as part of their holiday or time away.
For this reason many holiday let properties can be found in tourism hotspots – from the picturesque coasts of Suffolk or Cornwall to the rolling hills of the Welsh valleys – or indeed in the heart of some of our great towns and cities to cater for the growing city break market.
Will I need a holiday let mortgage?
If you decide to take the plunge, unless you have the funds to buy the property outright you’ll need a specialist holiday let mortgage. These may not be available from all lenders as holiday let mortgages are more complex than standard residential or buy to let mortgages, so it’s best to do your research beforehand or get in touch with a mortgage broker who can help you find the right deal.
Can I stay in my own holiday let?
Depending on your lender and the conditions of your mortgage, you may be able to stay in the property yourself for a limited time each year so you can enjoy your home away from home as much as your tenants will.
But remember – while you’re staying in the property you won’t be earning any income from it, so this will need to be taken into account to ensure you can afford the mortgage repayments.
How do I look after and manage my holiday let?
You could do this yourself, for example by listing your property on a catalogue site such as Airbnb – but be aware that some lenders might place restrictions on how the property is managed in this way. Or, you could get in touch with a reputable holiday lettings agency who will market your property for you, for a commission.
You’ll need to ensure that the property is kept clean and tidy for guests – if the property is local, again you could take care of this yourself, or otherwise you would need to look at employing a local cleaning business to do it for you. If you're looking for more info, local holiday lettings agency Best of Suffolk has kindly given us their top tips for new holiday let owners.
Is now a good time to invest in a holiday let?
Following last year’s political and economic twists and turns, the pound remains fairly subdued against other currencies such as the US dollar and euro – meaning that many holidaymakers are choosing to holiday at home rather than head abroad.
The weaker pound has also made the UK a more attractive place for foreign visitors, with international tourism numbers rising to 36 million in 2018, an increase of almost 20% over the last decade.
Plus, with increasing numbers of Brits taking a serious look at their carbon footprint and trying to reduce the number of flights they take, the outlook for the holiday let market looks set to be promising over the coming years as the great British ‘staycation’ swings back into fashion.
Where to go next
Unfortunately, very few of the big banks or high street lenders will look at holiday let due to the complexity involved with underwriting each case.
Here at Ipswich Building Society, we have a range of holiday let mortgages available for properties anywhere across England and Wales, whether it be a coastal cottage or a townhouse in a bustling city centre. Give us a call on 0330 123 0773 to speak to one of our friendly mortgage consultants and see what we can do for you.