28 Apr RISING numbers of landlords are likely to switch to specialising in holiday rentals and short-term lets
RISING numbers of landlords are likely to switch to specialising in holiday rentals and short-term lets in the months ahead, an expert says.
New figures show 2,426 holiday-let companies were set up last year, compared with 592 in 2016, according to the estate agency Hamptons.
Meanwhile, the rental agency Sykes Cottages, said 25 percent of 350 holiday-let owners surveyed had previously run properties as long-term lets.
Explaining what the attraction is, Jonathan Rolande, from the National Association of Property Buyers, said: “There is a good reason why holiday lets rent for far higher amounts than the equivalent buy-to-let property. Compared to a holiday let, a BTL is relatively ‘hands-free’. Once a tenant moves in they take liability for electricity, gas, council tax and cleaning. The landlord will need to carry out running repairs and maintenance. Managing a BTL is relatively straightforward and many landlords do it themselves or use an agent at a cost of around 8% per month, based on the rent collected.”
But Mr Rolande warned those looking to move into holiday lets that it isn’t as straightforward.
“A holiday let is a different story,” he said. “With far more tenant turnover, cleaning and inventories must be carried out constantly, potentially hundreds of times a year. Bedding and consumables need to be replenished as well. Management is very labour intense with agents charging around 20% of rent for the service. Wear and tear is likely to be a significant factor, much more so than with BTL.
“Landlords may well find themselves faced with more issues around noise and disruption affecting neighbours. Additional services such as refuse collection need to be considered too, not least because the amount of waste generated by holidaymakers is greater than that of a full time occupant.
“There is no doubt that holiday letting has its place for both landlord and holidaymaker. They also allow a greater number of people to visit an area, boosting the local economy. But landlords who are considering switching should ensure they do their homework, the extra income could be very hard-earned.”
A series of tax changes and an increase in the number of people holidaying in the UK have led landlords to choose short term lets over full-time tenancies.
As well as the tax advantages, there is also the draw of higher incomes. The average monthly rent in the southwest was £800 in the year to September 2022, according to the Office for National Statistics. Listings on Airbnb, a platform for short-term lets, show properties available for £155 a night on average in Cornwall, which would bring in the same rental income in just over five days.
There are an estimated 408,000 landlords in England, with 4.4 million households in the private-rented sector, according to the latest English Private Landlord survey. That is about 11 properties per landlord.
Government estimates put the number of holiday-let properties at 257,000 in England, with 62 per cent in the southwest, southeast and London. Thousands of other properties are rented out occasionally by second-home owners or people who – thanks to the arrival of sites such as Airbnb – have found it easier to make extra money from their home while they are away.
