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Why you should buy a UK holiday home in 2020

Why you should buy a UK holiday home in 2020_Rental Tonic

Bricks and mortar have always been a popular and lucrative investment vehicle. From buying your own home to investing in BTL property, the postwar UK property market in the UK has been the making of many a private property portfolio. Holiday lets and rental investments are another way to make money from property but, until recently, the advantages of renting out a holiday home were overshadowed by healthier growth in residential property.

However, the property market appears to be changing. Sky-high house prices, particularly in the Southeast, higher stamp duty rates for second homes, less favourable tax treatments for buy-to-let income – it all adds up to a much less attractive investment proposition for landlords.

Then came the 2020 pandemic, the lockdown and subsequent foreign travel restrictions. Not to mention the Brexit effect, which still won’t be fully felt until 2021 at the earliest. Both are having the effect of boosting domestic tourism, albeit for different reasons, and suddenly a new property investment window might be opening up.

Rise of the staycation market

The UK is full of beautiful holiday locations and these are now being increasingly rediscovered by Brits who are more than happy to stay in the country for their vacation.

According to VisitBritain, domestic tourism now accounts for nearly 80% of all tourism activity in the UK. In England alone, staycationers are spending around £72 billion per year. Short breaks seem to be particularly popular, offering greater flexibility for people’s budgets and time off.

Rise of overseas tourism_Rental Tonic

Rise of overseas tourism

The number of foreign visitors to the UK is also rising. VisitBritain’s pre-Covid-19 tourism forecasts predicted an increase to 39.7 million visitors for 2020, the highest level ever. August 2019 was the highest month on record for inbound visits and overseas visitor spending.

Clearly, the revenue generated through additional tourism creates a larger market for tourist accommodation and more rental investment opportunities for holiday landlords.

Rental Investment potential

Owning a holiday let can be a financially rewarding endeavour if you choose the right place in the right location for the right market. The West Country has traditionally always been a favourite holiday destination and Cornwall, in particular, has some very desirable areas indeed. “Honeypot locations including St Ives Bude and Padstow attract a lot of visitors and command higher property and rental prices as a result,” advises a guide to investing in Cornwall property.

Letting your property as a Furnished Holiday Let business benefits from tax advantages including offsetting mortgage interest costs against revenue, and reconciling council tax and other bills against income. Take a look at this updated holiday let tax guide for more information.

Easier travel

UK holiday destinations are easily reached by car, public transport or even by bike! Queues, delays and security concerns at the airport are becoming less palatable in today’s climate – whether for reasons of coronavirus or terrorism. The stress this can cause can easily be avoided simply by holidaying at home.

And that’s not all. There’s more flexibility about when to leave on holiday, who to bring along (including pets) and how much luggage and holiday equipment can be carried. Staycations are fast becoming a convenient and relaxing way to take time off.

Letting your property as a Furnished Holiday Let business benefits from tax advantages including offsetting mortgage interest costs against revenue, and reconciling council tax and other bills against income. Take a look at this updated holiday let tax guide for more information.

Greener holidays

With climate change high on everyone’s agenda, holidaying closer to home offers people the opportunity to lower their carbon footprint. In this way, holiday homes in the UK can be an environmentally responsible option for domestic tourists who wish to reduce their impact on the environment.

There’s no need to get on a plane, and many destinations can be reached by train or coach. If you want to tap into the green holiday market, why not consider investing in an eco-friendly build or rural location, embrace the principles of eco-tourism, or target your property towards cyclists or ramblers.

Are you looking for a rental investment further afield?

If you are considering a rental investment but want to look further afield, get in touch for a chat about rental investment opportunities in the Spanish market. We help owners achieve from zero to fully booked in their Spanish holiday rental or accommodation business.

We even launched a new division for Spanish property investment in Malaga and Andalucia. Our home for the last 20 years!

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annie button_Guest bloggerThanks to our regular contributor Annie Button for these four interiors tips to help your holiday villa or country cottage stand out from the competition.

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