- Stoppages have boomed since the pandemic began
- In June, Cornwall alone had 10,290 active Airbnb listings
- Seven rules to cover about getting the proper money and knowing about tax rules
The idea of a UK holiday home never loses its appeal. But over the past 18 months they’ve become more popular than ever — for good reason.
Tourist body VisitBritain has increased the number of domestic holidays this year compared to 2020, thanks to Covid.
Holiday home use has become fantastically popular not only as a personal bolthole, but also as a nice little earner.
Hot property: a thatched cottage in West Lulworth, Dorset
In June, there were 10,290 active Airbnb listings in Cornwall alone, as people flipped their properties to get extra cash through so-called short lays.
So if you want to join the holiday home craze, here are seven golden rules to follow.
1. Lock a Location
You can have your favorite places: After all, you’ll live in the new house, plus let it out.
But if you want to follow government figures for 2021, the most popular places to vacation in Britain this summer were the south-west – 24 percent ahead – along with north-west England, Scotland, Yorkshire and East Anglia.
Or if you want to downsize your property, interior firm Crafted Beds has worked out the average cost Airbnb hosts charge in various cities, which are more popular than rural locations for a two- or three-night break.
On top Newcastle comes to an average of £122 per night, followed by Leeds, York and Exeter, around £120.
2. Size Matters
Your budget may dictate this, but if you can, look at the potential visitor market in your area.
If the location is off the beaten track and quiet, a smaller property appeals to romantic weekend getaways or walkers booking longer periods.
If you are looking for a beach vacation home, it is likely to attract families and groups of friends, so a large property is the order of the day.
3. Find Funding
Independent finance service MoneyFacts says only 74 holiday late mortgages were available in August 2020; Now there are 186. However, there are many options.
‘Holiday let mortgages are designed for people who borrow for properties weekly or on a small basis such as Airbnb.
‘This is different from buy-to-let mortgages designed for properties for the long term.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says, “And the holiday home mortgage is different again because it is for the personal use of the owner.
4. Good Credit
James Greenwood of Stax Property Search says: ‘Works well for open-plan holiday letts, but separate utility space abounds. Storage allows the owner to keep their belongings while renting. Parking is a strong selling point.’
His Stack colleague Claire Cood – who lives in Cornwall – says: ‘Think about your online presence: the asset that Instagrammable always helps with.
‘Location-relevant fixtures like nautical paint and paneled walls are good in seaside locations.’
No matter how lovely the house is, you have to furnish it well; Quality furniture and fittings that withstand strong wear and tear (and pets if you allow them) will add to the bill.
Schofields Insurance, a specialist in Holiday Lets, suggests £15,000 to upgrade the interior of a two-bedroom cottage.
5. Hire an Agent
Chances are your holiday home is a little far from your main residence, so it’s hard to be on the spot for every change of tenants.
Agents charge 20-25 per cent of the booking fee. It sounds great, but it involves cleaning, laundry, and handing over keys.
On top of that, the agent will advertise, respond to inquiries, take bookings, as well as handle emergencies.
And agents’ fees are tax deductible.
6. Take Tax
The rules suggest that the most efficient property is a furnished vacation rental, which is rented out to a client for no more than 31 consecutive days.
In addition, the furnished holiday let must also be available to the public for at least 210 days of the tax year and at least 105 days for paying customers.
7. Add on Insurance
It’s boring, but necessary. Even if you let your vacation home out for a few weeks, most insurers won’t cover Airbnb-style short lays.
So you may need a separate cover. GoCompare is the first service of its kind to ask insurance applicants if they want to host short-term tenants and if so, whether they will need to pay for additional cover.