Mortgage applications are soaring for UK short-term holiday lets

 

With demand high for short-term holiday lets from holiday-makers, there has been a rise in investors applying for mortgages for this type of property investment.

The latest figures from Hodge Bank show there has been a spike in mortgage applications for short-term holiday lets. These kinds of accommodation are in high demand as many holiday-makers are planning UK staycations for the spring and summer.

Hodge Bank has revealed the most popular destinations for holiday let buyers. The south-west is the most popular region with 39% of purchases. Wales follows with 19% and the north-west with 12%. Many are forecasting coastal spots and national park areas, such as the Lake District, will be particularly busy this year.

Emma Graham, business development director at Hodge Bank, says: “Many people have not been able to holiday abroad for more than a year now and staycations have therefore become hugely popular.

“We think this has almost certainly led to people re-evaluating their finances, as well as holiday plans and the holiday let market is looking very healthy.”

Mortgage options for holiday lets

Lenders are expanding their offerings to meet this growing demand in the short-term holiday let sector. In the past year, more lenders have opened up mortgage options for this type of property investment.

The data from Hodge Bank shows buyers are willing to pay £403,143 on average for a holiday home. This is nearly two thirds higher than the average house price in the UK. Of those buying a holiday let, 35% re-mortgage their existing home to finance it, and 65% take out a new holiday let mortgage.

Research by Moneyfacts reveals the number of holiday let mortgage options has increased substantially. Mortgages for these kinds of property investments have grown by 45% over the past six months. Product availability has even doubled since August last year.

Rachel Springall from Moneyfacts comments: “Consumers may have taken some time to reflect on staycations in light of uncertainties surrounding international travel and how a holiday let could be a worthy investment.

“Lenders have moved over the past six months to cater to the demand for those looking to invest in property, as there has been a rise in holiday let deals of 45%, and product availability has in fact doubled since August 2020.”

UK staycation boom

Lockdown restrictions have been easing in recent weeks. And from Monday 12th April, UK staycations are allowed in self-contained accommodation for members of the same household. Since Prime Minister Boris Johnson first announced the roadmap out of lockdown, there has been a surge in searches and bookings for short-term holiday lets.

Last-minute ‘minications’ became extremely popular last summer after lockdown restrictions eased. This will likely happen again this spring and summer. With there still being uncertainty around international travel, more people are deciding to remain in the UK this year.

Even before the COVID-19 pandemic, there had been a rise in demand within the short-term let sector. It’s become more common for holiday-makers to want to stay in private accommodation in city, coastal and rural destinations.

Attractive yields and tax advantages

There are a number of benefits to this kind of property investment. With a rise in demand for short-term holiday lets, there is room for growth in the sector. For starters, yields have the potential to be higher than traditional buy-to-lets.

From a tax perspective, furnished holiday lets are treated different to buy-to-let properties. A holiday let is liable to business rates instead of council tax if an owner intends to make the property available to let for 140 days in the upcoming year.

Short-term lets have become a go-to option for property investors. And there will likely be even greater take-up from investors in the coming months and years with increasing interest in UK staycations.

At BuyAssociation, we have a number of short-term let property investments available. For more information, get in touch.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800

ba-

Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator

.

Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.

Login

Not a member? Sign up for free

short-term lets staycation

Mortgage applications are soaring for UK short-term holiday lets

Example

By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.