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Staycation boost for short-term let landlords

A number of buy-to-let landlords have switched to short-term lets in recent years, as a consequence of skewed policy that favours holiday homes over long-term properties to rent. 

Renting out a property as a short-term let or holiday home has proved extremely profitable for some property investors, and a combination of changes to buy-to-let tax and the rise of Airbnb and rivals has made it increasingly popular.

But the Covid-19 outbreak had an adverse impact on the sector, as demand for short-term accommodation plummeted, owed in part to the fact that international visitors to the UK is currently far lower than normal. 


However, the collapse in foreign holidays has presented an opportunity by boosting the demand for staycations.

The government’s announcement last week that those traveling from Spain now need to self-isolate for 14 days following a spike in cases has further boosted prospects for landlords who offer short-term lets in the UK. 

With the threat of other countries joining the list as cases rise across Europe, many are considering staycations in Britain rather than risk having to self-isolate for two weeks, particularly those who cannot work from home. 

According to Savills, the vast numbers of UK holidaymakers opting for a staycation this summer is a trend set to continue in light of current international travel restrictions.


Recent research by STR indicates that several regions have outperformed in terms of occupancy and in many cases, their Average Daily Rate (ADR). 

Hotspots in Cornwall, namely Newquay and Polzeath, are thriving with many hotels at 100% occupancy and some seeing rates up 20% per cent on this time last year. 

James Greenslade, associate director, Savills Exeter, commented: “Investors are showing unprecedented interest for quality assets in our coastal and rural locations.”

Airbnb accommodation now accounts for around a quarter of all property listings in some parts of the country, according to research. 

A study published by ARLA Propertymark earlier this year suggested that almost 500,000 properties could be left unavailable for longer-term rent as more landlords exit the market in favour of short-term lettings.

The Residential Landlords Association (RLA) argued that this is primarily because the tax system favours holiday homes over the provision of long-term homes for private rent, illustrated by the fact that the government is phasing out mortgage interest relief for landlords to the basic rate of income tax, although this measure does not apply to furnished holiday lets.

If this trend continues, more properties will be taken out of the long-term rental market, having a knock-on effect for renters and neighbourhoods.

David Smith, a partner at JMW Solicitors the now former policy director for the RLA, said: “Government policy is actively encouraging the growth of holiday homes at the expense of long-term homes to rent which many families need. This is completely counterproductive, making renting more expensive and undermining efforts to help tenants save for a house of their own.” 

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