{"id":5023948,"date":"2019-06-15T10:10:00","date_gmt":"2019-06-15T09:10:00","guid":{"rendered":"https:\/\/www.buyassociation.co.uk\/?p=5023948"},"modified":"2019-06-15T10:10:00","modified_gmt":"2019-06-15T09:10:00","slug":"are-holiday-lets-the-new-buy-to-let-as-landlords-seek-new-opportunities","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-au\/news\/are-holiday-lets-the-new-buy-to-let-as-landlords-seek-new-opportunities\/","title":{"rendered":"Are holiday lets the new buy-to-let as landlords seek new opportunities?\u00a0 \u00a0"},"content":{"rendered":"

Cottages.com\u00a0has reported a 23% increase in its\u00a0holiday property\u00a0portfolio over the past year, which could\u00a0in part\u00a0be\u00a0attributed to\u00a0an increasing number of\u00a0landlords investing in holiday lets over traditional buy-to-let\u00a0properties.<\/strong><\/p>\n

The increasing popularity of domestic tourism and the “staycation” has encouraged landlords looking for new avenues of investment, amid changing regulations and squeezed profit margins in the private rental sector.<\/p>\n

Bournecoast, a\u00a0specialist holiday lettings agent\u00a0in Bournemouth,\u00a0has seen an increase in the number of landlords enquiring about the advantages of holiday letting. Des Simmons managing director said, \u201cProperty investment<\/a> is a very serious business, with a number of choices available to unlock the true value of a property.<\/p>\n

“The best investors we deal with are those who explore all the options available to maximise their income, and realise that with the help of property experts the best option can change over time for the same property.\u201d<\/p><\/blockquote>\n

Holiday lets are classed as businesses<\/h4>\n

It\u2019s not hard to see the opportunities for landlords<\/a> looking to maximise their returns. Income from furnished holiday lets is considered \u2018earned\u2019 by HMRC as long as its criteria is complied with. While residential buy-to-lets are classed as investments and are taxed on the full amount, holiday lets are classed as businesses. As long as the property is available for at least 210 days a year and let for at least 105 days, landlords can claim mortgage tax relief; plus earnings can also be invested in a pension, with tax relief.<\/p>\n

Holiday let landlords can\u00a0also\u00a0claim capital allowances, rather\u00a0than\u00a0the wear and tear allowances that long-term letting landlords receive, and take advantage of\u00a0entrepreneur\u2019s capital gains tax relief when\u00a0they sell the property.<\/p>\n

Brokers\u00a0view\u00a0holiday lets as a growth area<\/h4>\n

The increasing interest in holiday lets is backed up by mortgage brokers who\u00a0consider the\u00a0market a huge growth area\u00a0and are appealing\u00a0for\u00a0lenders to give landlords more options.<\/p>\n

Mortgage providers have traditionally been\u00a0wary of lending on holiday let\u00a0properties.\u00a0The difficulty in assessing the potential rental income<\/a>\u00a0due to the\u00a0seasonality\u00a0and irregular income levels\u00a0of the business\u00a0has\u00a0meant that many lenders have\u00a0chosen to\u00a0steer\u00a0clear.<\/p>\n

Currently, only a small number\u00a0of providers cater\u00a0to\u00a0the investment holiday let market. It\u2019s the smaller building societies that have been more active in adapting to the nature of the income of holiday\u00a0lets\u00a0according to David Hollingworth, associate director of communications at\u00a0brokers\u00a0L&C Mortgages, who sees the standard buy-to-let market splitting into many different segments.<\/p>\n

Mortgage broker at AK Partnership\u00a0Dean McCormack,\u00a0also thinks that\u00a0there is the potential to look at higher loan to values on holiday lets because of strong rental yields.<\/p>\n

The mortgage market is responding<\/h4>\n

Most recently, West One Loans announced that it aims to be a \u2018meaningful player\u2019 with the introduction of a range of buy-to-let mortgage products, including Airbnb <\/a>and holiday let properties. Marie Grundy, West One Loans sales director, said: \u201cHoliday lets are currently exempt from the changes in tax relief, therefore we could see more demand in this area\u2026and we believe that our specialist, case-by-case approach can help\u201d.<\/p>\n

It was Leeds Building Society that paved the way as the first lender to launch a dedicated holiday let mortgage range in 2013. \u202fMatt Bartle, director of products at Leeds Building Society, said: \u201cDemand has been growing for our products since then and we saw an almost 10% increase in holiday let mortgage applications in 2018 when compared with 2017, as landlords look to diversify their portfolios.\u201d<\/p>\n

Like every other property investment a holiday let carries its own risk, but for landlords looking to diversify their portfolio, it could be a profitable addition.<\/p>\n","protected":false},"excerpt":{"rendered":"

Cottages.com\u00a0has reported a 23% increase in its\u00a0holiday property\u00a0portfolio over the past year, which could\u00a0in part\u00a0be\u00a0attributed to\u00a0an increasing number of\u00a0landlords investing in holiday lets over traditional buy-to-let\u00a0properties. The increasing popularity of domestic tourism and the “staycation” has encouraged landlords looking for new avenues of investment, amid changing regulations and squeezed profit margins in the private rental… Read more »<\/a><\/p>\n","protected":false},"author":3380,"featured_media":5023967,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[8,4,6],"tags":[22,426],"class_list":["post-5023948","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-alternative-investments","category-investment","category-uk-housing-market","tag-buy-to-let","tag-holiday-homes"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/posts\/5023948","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/users\/3380"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/comments?post=5023948"}],"version-history":[{"count":0,"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/posts\/5023948\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/media\/5023967"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/media?parent=5023948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/categories?post=5023948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-au\/wp-json\/wp\/v2\/tags?post=5023948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}