Mortgages for Business is committed to keeping both our staff and clients safe during the COVID-19 outbreak while maintaining the best service possible. Our teams are working from home, but don’t worry, you can still contact us in the usual ways.
To read our comprehensive FAQ guide on how the emergency interest rate reduction and Coronavirus outbreak could affect your mortgage, please click here.
If you want to request a payment holiday, please contact your lender directly. For lender contact details, click here.

Experts predict holiday let market set to boom

Many industries around the UK have suffered greatly from the effects of lockdown, the travel industry is no exception. As lockdown is starting to lift in the UK and with long-lasting disruption to international travel expected, experts are predicting a staycation boom... Andy Elley, Head of Commercial, gives his thoughts on what to expect over the next 12-24 months.

At the start of 2020, many of us had grand plans for travel in 2020... whether it was a hop across the channel to Europe or long haul dreams to Bali and beyond. But all plans for holidays and travel have been grounded, with coronavirus bringing the travel industry to a halt. 

Fast forward to the summer, and we are now seeing the first tentative steps out of lockdown towards whatever our ‘New Normal’ looks like. So what does this mean for travel in the UK? 

As lockdown eases, we are likely to be able to travel locally and then more widely within the UK, giving people the freedom that lots of people have longed for over the last 3-4 months. 


A boom to UK holidays and tourism

Jean-François Ferret, Chief Executive Officer of Small Luxury Hotels of the World, says: “Initially, travel will be predominantly domestic and staycations. Travellers are also more likely to venture out to lesser-known and less-populated locales to avoid crowds, hence small boutique properties like ours offering standalone accommodation and private islands will generally be preferred. Spa resorts will be popular too as people focus on improving physical and mental health.”

James Jayasundera, Founder & Managing Director of Ampersand Travel also backs this view up, predicting “a huge resurgence in domestic travel as international travel will still be complicated and a lot of people will have less disposable income that they had before.”

Seaside Towns to return to British hearts

Seaside towns are expected to surge in popularity, as the UK rediscovers the delights of their home country, minus the hassle of jetlag and long flights! Jayasundera also states that “this may even lead to long-term revival of UK seaside and Spa towns as the combination of warmer weather due to global warming and a desire for more sustainable and environmentally friendly travel will create demand that will make them desirable and relevant again.”

The community spirit which the UK has fostered during lockdown will support this bolster to staycations, with people wanting to support local communities more than ever.


Opportunities for Investors

So what does that mean for property investors? As the travel industry are widely predicting a boom in staycations, holiday lets will be at the forefront of this trend. Holiday lets will prove to be a popular option, as family groups and bubbles can stay together in larger holiday lets, away from other people. 

We are already seeing plenty of enquiries for people looking to invest in new holiday lets, and there are lots of funding options available. I expect to see this increase in interest from operators or savvy investors to continue. 

I would expect to see vacant commercial properties in seafront locations be converted into holiday let accommodation. Yield in this sector, including Airbnb, can be upwards of 7-10% and more for the largest of holiday lets.

If you are planning on taking out a new holiday let mortgage, please be aware that there new financial criteria that providers are putting into place given the current situation in the holiday let market. Borrowers are also required to have funds to the equivalent of 12 months mortgage payments (rising to 18 months cover for any element of the borrowings which are projection-based), which need to be held as additional security. If you are uncertain whether you would meet the criteria, just give us a call, and we can talk you through what you will need. 

If you are thinking about getting started with holiday lets, we have lots of knowledge and experience within this sector. Make sure you read our Guide to Holiday Lets and our Holiday Let FAQ!

Whether you’re buying your first or your fifth holiday let, we are experts in finding funding for these type of properties. Call us on 0345 345 367 88 or email enquiry@mortgagesforbusiness.co.uk and see how we can help you today!   

 

 

Author

NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Get in contact with us: 0345 345 6788 or ...

Submit an enquiry
Arrange a call back