With so much economic uncertainty surrounding Brexit, it can be difficult to know how best to invest your money. The government is discouraging buy-to-let investments, but one area definitely worth considering is purchasing a property to use as a holiday rental property here in the UK.
Decreasing interest rates mean now is a good time to purchase a property, and a no-deal Brexit could result in house prices falling by 6%, according to KPMG. Holiday lets are treated as a business rather than an investment – as is the case with a buy-to-let – which means that they enjoy generous tax breaks on normal business expenses incurred in the running your property, including insurance, repairs, furnishing, cleaning and management.
And demand for holiday lets in the UK is on the up. Since the EU referendum, the value of the pound has fallen significantly, resulting in trips to Europe becoming more expensive, which in turn has fuelled demand for staycations in the UK. This summer alone saw a 33% YOY increase in searches and bookings for trips within the UK between June and September.
Furthermore, the fall in the pound against the euro makes the UK a more attractive option for Europeans holidaying abroad, offering visitors more ‘bang for their buck’ when exchanging currencies.
This trend is set to continue into 2020. Cornwall-based holiday lettings specialist Beach Retreats has seen an 103% YOY increase in bookings for 2020; a growth, says managing director Andrew Easton, that is unprecedented for the business, which historically has seen a 15 – 20 % increase in advance bookings YOY. Beach Retreats isn’t alone in this projected spike in visitors: celebrating 50 Years since the Development of Tourism Act, Visit Britain is striving to attract a record 40 million inbound tourism visits by 2020, the first time it will break through the 40 million visitor mark.
Andrew Easton continues : “We’ve been seeing a steady increase in demand for staycations in Cornwall over the past 5 years, but this year’s advance bookings is a record high for us and presents a strong investment opportunity for those considering buying a holiday home. We have a portfolio of over 170 coastal properties, the owners of which can expect to achieve anywhere from £30,000 to £100,000 gross per year, as well as have a home-from-home for themselves to escape to Cornish coast.”
Acorn Property Group corroborates the trend; Nicola Markham joint regional managing director and group sales director explains: “We continue to see a number of investors each year interested in our developments, particularly in Cornwall and Wales. Our new build homes offer a fantastic return on investment due to their desirable locations and high-quality finish as well as being low maintenance and easy to manage. We expect that the demand for holiday homes will continue with the trend for ‘Staycations’ increasing in the UK.
“The Dunes, one of our beach front developments in Perranporth, sold out off plan last year, with a number being sold to investors” continues Markham. “In addition, our coastal development, The Links, is set just metres from the golden sands of Rest Bay in Porthcawl, providing the perfect opportunity within the Welsh holiday home market.”