Looking to opportunities, Jean Errington explained that savvy investors are continuing to put their faith in holiday let purchases as they look to benefit from high yields and favourable tax incentives, as seen in recent years
2022 is expected to be a significant year for brokers operating in niche areas of the market, according to Jean Errington, business development manager at Harpenden Building Society.
She said: “As a specialist lender serving the England and Wales holiday let market, we see strong indications that 2022 will be another significant year for brokers operating in this niche area as the de-mand for staycations continues unabated.”
Errington went on to say that she believes staycations are here to stay and will continue to rise in demand.
“Holidaying opportunities overseas may have increased but remain uncertain,” she added.
The Scientific Advisory Group for Emergencies (SAGE) stated that future waves of COVID-19 infection should be expected. However, while not immune, the UK has a world leading vaccination programme providing protection against new strains making us as COVID safe as any nation, outlined Errington. This point alone will, Errington believes, encourage many people to continue holidaying here, on home soil.
The war in Ukraine is also likely to impact overseas travel in the year ahead. If it continues or escalates further, travel will be affected, particularly by restricted air space. Wider impacts like the hike in fuel prices, as result of the conflict, will also affect overseas travel and the cost of flights for some time to come.
Indeed, the rise in fuel prices is already being felt in the UK, with the cost of gas having risen massively in the past few weeks. This has led to the cost of running a home rising – in turn making it harder for people to afford travelling abroad.
Errington said: “These are just a couple of examples, but with global uncertainty on this scale, I predict the UK holiday market and the demand for holiday let accommodation will remain as strong as ever.”
Looking to opportunities, Errington explained that savvy investors are continuing to put their faith in holiday let purchases as they look to benefit from high yields and favourable tax incentives, as seen in recent years.
This is often at the expense of the traditional buy-to let market, which has to fight to compete in relation to returns and benefits.
“The significant number of holiday let applications presented to the Harpenden team is testament to the popularity of this investment opportunity as brokers look to convert enquiries into sales through an experienced holiday let lender,” she added.
Errington went on to say that rather than facilitating holiday lets solely in traditional coastal hotspots, Harpenden Building Society will additionally offer financing in less obvious locations, like areas steeped in history or city centre destinations, recognising their tourism credentials in ways some lenders overlook.
She believes this presents a significant opportunity for brokers with customers wanting to buy properties away from traditional holiday let areas and where housing stock may be more accessible.
“We have also introduced a personal usage allowance of up to 90 days, accept Airbnbs and we lend for properties above commercial units/properties, features not always available in the market,” she added.
One of the main reasons behind the original rise in demand from property investors for UK holiday lets was Brexit and the fall in the value of the pound favouring UK holidays. This, combined with the impact of the pandemic, has resulted in a lively marketplace, with high amounts of demand and sup-ply.
Holiday lets are also highly profitable, with higher than average returns for a rental property – however, the high number of guests over a short period of time is an added complication.