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TODAY'S OTHER NEWS

Rise in popularity of the ‘staycation’ creates opportunities for BTL landlords

The rise in popularity of holidaying in the UK or ‘staycation’ has led to a mini boom for the UK tourist industry.

With lots of events planned around the country, designed to encourage people to take a last minute break, this April bank holiday weekend looks set to be busy for hotels, restaurants and tourist attractions.

With staycations increasing in popularity, a new report by Sykes Holiday Cottages suggests that holiday home owners can expect their property to generate in the region of £20,000 in revenue, up from £18,000 the previous year.

Fresh research shows from Sykes Holiday Cottages shows that two-thirds - 66% - of Brits enjoyed a staycation last year, up from 56% in 2017.

Cumbria, Cornwall and Dorset have emerged as the most profitable places to own a holiday home, according to the latest Sykes Staycation Index.

Cumbrias was the most lucrative holiday hotspot last year, with a four-bedroom property generating average revenue of £28,000 a year, followed closely by Cornwall and Dorset.

The study found that home comforts are increasingly sought after by staycationers, with properties with WiFi making 16% more, and open fires boosting revenue by 14%.

The demand for dog-friendly accommodation is also on the rise, with properties where pets are welcome earning 11% more.

Graham Donoghue, CEO, Sykes Holiday Cottages, said, “The UK tourism industry is going from strength to strength – and it’s paying dividends for holiday property owners.

“With holiday let yields continuing to outpace residential buy-to-let growth, they’re becoming an increasingly attractive option to investors, in terms of low risk and high yielding assets.

“With a surge in demand for staycations, our cottages are generating more revenue than ever before. And with staycations set to soar further, there’s never been a better time to invest.” 

Poll: With the UK tourism industry going from strength to strength, would you consider entering the holiday letting market?

PLACE YOUR VOTE BELOW

  • Paul Barrett

    Trouble is there have already been murmurings about changing the tax status of such properties.
    S24 to be applied possibly.
    It could be a question of out of the frying pan into the fire.
    Just owning a second property is enough to get the slavering idiot Labour Party working out how to tax these evil second home owners til the pips squeak.
    Councils will also be considering ways they can screw 2nd homeowners.
    So it is far from clear that converting from AST lettings to FHL etc will be worthwhile.


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    Much more lucrative in terms of income than AST though Paul?

    Paul Barrett

    Perhaps more lucrative though far more hassle and that is only as long as the current taxation policies for FHL remain.
    Surely there are only so many priperties in relevant areas that would be suitable as FHL!
    It is a far more hands on job unless it is delegated which has a cost.
    Then there is the risk of voids.
    With a mortgage risky not having sufficient income to cover monthly mortgage payments.
    With FHL you generally need larger reserves if mortgaged.
    All rhat glitters is not necessarily gold!!

     
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    I suppose that I am looking at it from a non-mortgaged point of view.
    I own all my properties outright, including the barn that I have on my land as plan B backup for weekend or holiday lets, also overspill from the 3000 delegate plus Convention Centre that has been built at the Celtic Manor, as I am situated approx 3 miles away in the picturesque Usk Valley.
    I agree that it would involve more hassle, but as long as the returns are good then I don't mind that, what with the extra hassle we are getting from government in the PRS.

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    If you own outright or with a mortgage, i would say its better to have a mortgage with a big lender behind you, either way Labour is a def No No and Conservatives are a No. Voter grabbing at the moment! When most LL with or without a mortgage sell up and councils are left to provide more accomodation, both parties with be sniggling back asking us Professionals to provide as we have been doing so for past 30-40 years.
    Stupid clueless money seeking non earning council and MPs bods who have no idea how to be a professional LL.

  • Paul Barrett

    As a general principle a LL can afford to take more risks on diversification if mortgage free.
    For leverage LL FHL are a big risk.
    When you are mortgaged you tend to be more cowardly.
    Which is why most of us mortgaged coward LL tend to stick to bog standard resi BTL.
    For all the well known reasons such a strategy is becoming less viable.
    Taking the plunge into FHL is for a very brave LL especially if needing a FHL mortgage.
    I would suggest that for LL with little financial resilience that FHL are a risk too dar.
    I would want to have at least 6 months of mortgage payments as savings just incase the staycationers DON'T come in the numbers and price point that is expected.
    Me ulta cautious; Absolutely!!!
    When you are an unecumbered LL you can afford to be less cautious.

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    Dont agree mortgage free or mortgaged, same risk, same business approach if handling it professionally ie run your business with sole aim to maintaining your assets collecting rent on due date dealing with any problem immediatly, deal with any non payment immediatly, inspect your property regularly. Make and maintain a profit. Worked for past 30 odd years through 4 or 5 governments numerous Budgets, several rate increases 3 depressions 1 real credit crunch.
    Be alert, Be smart, learn and listern.

    Paul Barrett

    DOESN'T matter how smart you are.
    If the staycationers DON'T come you're f####d!!!!
    There could be any number of reasons why they might not come.
    If a leveraged LL with a FHL BTL mortgage how is the mortgage paid!?
    Miss 2 mortgage payments and find the property repossessed etc etc.
    FHL very risky if mortgaged.
    Staycationers simply aren't guaranteed.
    Especially if lots of LL start down the FHL route.
    Oversupply then becomes a very big problem

     
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    Tens of thousands of Flats being built clearly not required, just because they are subsidised making millions of £’s for big Developers. I disagree with everyone there is no shortage of housing, it the sheep going through the hole in wire fence syndrome.

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    No I will stick where I am, I'm 65 drawing my pension, i'm mortgage free and split my income with my wife, keeps us both just below 40% tax, I do my own repairs, clean ups and repaints, works for me, if it ain't broke don't mend it, you can't teach an old dog new tricks .

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    Mortgage lenders are clueless to when it comes to B2L..
    When they and the banks caused the CC in 2007/2008, i refused to pay mortgages via DD, i kept payments till the lenders assured me they knew what they doing, it took several months before they got anywhere knowing what they were doing, they are not rent collectors. They and the banks caused a 30% loss on assett values, we professional LL didnt. They are more savvy now. Sec 21 going may cause them a problem however in 30 odd years only had to issue 3 Sec 21s, says it all really, manage your property business smartly, act quick, be alert, dont be afraid, its your business not the council, government or lender, if you have a million plus business run it in a professional and smart way.

  • Paul Barrett

    Yep and being smart means having the resilience to be able to service mortgage payments if for whatever reason there are no tenants paying rent.
    Not many LL are in such a fortunate position

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