Where Should You Buy a Holiday Let?

New data compares average monthly rental income and average weekly holiday let income in ten top UK holiday destinations.

It’s no secret that, due to the pandemic, the UK holiday let industry is booming. And while some sceptics believe it’ll be short-lived, new data published by West One reveals that bookings for 2022 are already up 134%. With so much uncertainty around international travel, 70% of the British public say they would like to explore more areas of the UK, and 52% “appreciate holidays in the UK more than ever before”.

It’s fair to say that property investors are becoming highly active in this market; Cottages.com reports a 74% increase in the number of properties now registered on its website. When you look at the research West One has completed, comparing average rental vs holiday let incomes for ten of the top UK holiday destinations, it’s easy to see why so many investors want in on the action.

Location

Average Property Price

Average Weekly Cost for Holiday*

Average Monthly Rent

St. Ives, Cornwall

£449,682.00

£2,067.00

£795.00

Edinburgh

£304,750.00

£1,448.00

£1,367.00

Torquay, Devon

£253,439.00

£1,408.00

£790.00

Weymouth, Dorset

£274,707.00

£1,233.00

£681.00

Fort William, Highlands

£176,910.00

£1,058.00

£750.00

Cirencester, Cotswold

£367,597.00

£1,027.00

£1,216.00

Caernarfon, Snowdonia

£167,966.00

£994.00

£486.00

Harrogate, Yorkshire Dales

£381,653.00

£894.00

£955.00

Bakewell, Peak District

£443,458.00

£891.00

£1,051.00

Windermere, Lake District

£412,087.00

£873.00

£1,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Average cost of a week holiday for a family of four.

When you crunch the numbers a bit further and compare 30 weeks holiday let income to 12 months rental income, the differences are staggering. At the top end in St. Ives**, a holiday let property will, on average, bring in £52,470 more income than a standard rental property. The least significant difference in Bakewell still comes in at £14,118. Across the ten locations, the average income generated by a holiday let property vs standard private rental increases by £24,770. Even if you’re factoring in additional running costs, it’s a clear incentive.

In terms of holiday let mortgages, we’ve seen several buy to let lenders launch new holiday let products, with some entering the market for the first time. Obviously, this is fantastic news for investors; the more competitors in the market, the better the pricing becomes! Currently, two-year fixed holiday let mortgage rates start from 3.24% at 65% LTV, and from 3.39% for a five-year fixed***.

We have a fantastic understanding of the holiday let finance market here at Mortgages for Business and many useful resources to aid your research and decision-making. To talk through your plans and ideas, give me, Rob Gurr, a call on 01732 471673 or email me robg@mortgagesforbusiness.co.uk.

 

** Residents of St Ives voted to ban people buying new-builds in the town as second homes back in 2016. The ban is currently still in place, with mixed reviews. To re-iterate, this only applies to new-build properties, but is something to be aware of.

***Rates as at July 2021.

Source: West One.

 

 

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

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