Holiday let

We believe the hay days of holiday lets is well and truly over. The market for holiday rentals has been ruined by the tax disadvatnage that now kicks in, thanks to Jeremy Hunt's recently declared policies. Add to that, the effect of a separate use class being brought in for holiday let use, and one quickly realises that this sector is going to get red-taped soon. But the real question to ask is - why have landlords been gravitating towards seasonal income producing holiday letsover bread and butter BTLs in the first place? The answer lies in the persistent persecution of landlords and housing providers by militant tenant unions, in addition to forced government intervention in the sector. If you bite the hand that shelters you, soon you will have no place to find another home. Stop punishing those that are putting private money to home those that can't afford their own place, and you will see a return of good, responsible landlords willing to offer more options on the rental market.

In the last budget, the Government increased taxation on Holiday Let Properties, which will start in April 2025. This is believed to take £245 million a year out of tourism investors' wallets.

It is unknown how higher taxation will affect the number of Holiday lets available for staycations and international holidaymakers. The Conservative Government aimed to reduce competition with homeowners in holiday locations.

If mortgage lenders learned lessons from the government's introduction of a similar Tax for Buy-to-Let Landlords, they would quickly develop LTD Company Holiday Let Mortgages.

There are still many clients looking at Holiday Let investments as part of their strategies and I don't expect that to change for the forseeable. The returns it generates make them a worthwhile investment still in the right areas.

H D Consultants launched a new brand and team of advisers, HCH Financial Services, in January 2024 to help and support our many property investor Clients ... specifically in the holiday let space.

Working alongside the experienced team at Holiday Cottage Handbook who provide resources and education in this investment area, we provide expert and specialist mortgage and insurance holiday let / STR advice and strategy.

Having worked as a BTL sector specific mortgage adviser for over 30 years, we have worked with first time landlords as well as professional portfolio owners and the peaks and troughs of the holiday let sector is really no different.

Property investors and mortgage borrowers (UK, expat and foreign nationals) want to know if there is a viable investment benefit, and although we see national and regional trends, as independent brokers we can always find a solution - especially from the growing pool of holiday let lenders who support our comprehensive proposition.

At Goldmanread we sepcalise in Holiday Let mortgages. We have seen a definite downturn in the Holiday Let market having been relatively buoyant previously. The previous favourable tax treatment of Holiday Lets combined with the effects of Brexit meant there was a mini boom in this area. However increasingly negative media around Holiday Lets and that at least one major lender, Leeds Building Society, have withdrawn entirely Holiday Let mortgages in certain locations has meant that investors have started to feel more cautious about this investment class. Holiday Let landlords are starting to face the same prejudices as the buy to let landlord. Given the extra management and compexity of holiday lets our feeling is that although people will continue to invest in this area for the time being Holiday Let has reached it Nadir.

There's no doubt that recent government announcements have spooked the holiday let market, yet we wait to see what actions will actually come to light following some strong industry lobbying.

In reality, that's lead to an increased level of caution in the holiday let market whilst investors hold their hand whilst details are finalised.

We've had a number of clients look to switch strategy and invest via a limited company structure rather than in their personal name, with some even changing course mid-purchase.

The facts remain that holiday let investing is still attractive to many, with the ability to utilise the property themselves as well as use it as a vechicle to plan for their future.