Following government changes, the costs for buy-to-let landlords have risen. PropertyReporter.co.uk suggested in November 2017 that this has caused many landlords to diversify into other property sectors, with many looking for holiday lets to increase their rental yields.
Due to the low value of the pound, the number of overseas visitors holiday in Britain is high, and many UK residents are staying in this country for their holidays rather than heading abroad. Visit Britain has announced that 23.1 million overseas people took holidays in Britain between January and July 2017.
To satisfy the demand for holiday accommodation, landlords are looking at purchasing holiday let properties. Landlords can generally charge more rents for holiday lets than for long-term residential tenants, but costs are higher. If using Airbnb or other letting agents, there are agents’ fees to pay. A cleaner needs to be employed after every holiday let, and in some locations, properties may remain vacant during out-of-season periods.
Taking the extra costs into account, it is possible to achieve holiday let rental yields of around 6%, which is higher than the average buy-to-let rental yield.
There are specialist lenders that provide commercial mortgages for holiday let properties, and a mortgage broker will be able to find the best deals for holiday landlords. Mortgage applications can be considered from individuals, companies and sole traders. Ex-pats living outside of the UK can also apply for a commercial mortgage.
Should current trends continue, holiday let property could be an attractive investment for landlords wishing to diversify their property portfolio.