Your Business and Industry
‘Staycations? Supporting your landlord clients financing holiday lets’
With the rise of the staycation, is this sun-drenched imagery still working? If research from Sykes Holiday Cottages is anything to go by, this gimmick now needs far more strings to its bow as holidays and breaks within our very own shores remain a highly attractive option for a strong proportion of the population.
This research revealed that three in 10 (30%) UK adults won’t be holidaying abroad over the next year as the cost-of-living crisis continues to stretch household finances. Concerns for the environment (18%) and foreign conflict (17%) also appear to be putting Brits off jetting abroad, with many choosing to discover what lies closer to home. Sykes’ booking data separately shows that the cost-of-living crisis is impacting how people travel in the UK, with the holiday let agency witnessing a significant increase in the volume of late bookings and short breaks in 2024.
The holiday let sector has certainly risen in prominence over the past few years from a lender and intermediary perspective, having experienced sustained demand even in a post-pandemic era. Although, much like the wider BTL sector, it continues to evolve from a legislative, licencing, tax and complexity standpoint. For example, plans to introduce a statutory registration and licensing scheme for all visitor accommodation in Wales have been recently announced by the Deputy Minister for Arts, Sport and Tourism, with legislation expected to be introduced to the Senedd before the end of the year.
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Across the UK, Northern Ireland has had a certification scheme established for all visitor accommodation since 1992, with Scotland having recently introduced a licensing scheme for short-term lets. The UK Government is also pursuing a registration approach for short-term lets.
Any property investment has always come with its fair share of risk and reward, although increased regulatory and local council scrutiny on holiday lets is making some investors now think twice. However, demand remains robust from professional landlords due to the lure of potentially higher yields and the opportunity to introduce greater divestment across their portfolio to help negate their risk exposure.
This is an area of the BTL market which we are pleased to offer as a core proposition within our ‘Buy to Let by Foundation’ range.
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Holiday lets may not always be the most straightforward cases and landlords incorporating these into their portfolios might not always have the most straightforward financial profiles. They differ from Short Term Lets, in that Holiday Lets often have seasonal fluctuations in rental income, but we are able to average out that income over 39 weeks.
This is where our manual underwriting and expertise in mixed portfolios comes into its own. As a specialist Buy to Let lender, our criteria-led approach to buy to let can offer a far greater array of options to our intermediary partners and their clients.
*This article was originally on The Intermediary
References:
https://www.gov.wales/plans-unveiled-statutory-registration-and-licensing-
scheme-visitor-accommodation-wales
https://www.propertyreporter.co.uk/holiday-let-landlords-
set-to-benefit-from-continued-demand-for-staycations.html
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