Could a UK holiday buy-to-let property be a good investment?

a cottage in Cornwall

If you’re looking to become a landlord in some capacity, a UK holiday buy-to-let (BTL) may currently present a good opportunity for you to derive income from property. This is because the available number of holiday BTL mortgage deals has increased in the past six months.

According to statistics from Moneyfacts, four more lenders have started offering a holiday let mortgage product since April 2021.

This increase comes alongside a rise in the number of deals available across the entire market, climbing from 149 to 186 deals.

With this many products available, this could be a good time for prospective holiday landlords to access the market.

UK holidays highly popular since lockdown

The main reason that a holiday BTL is worth considering right now is that the number of Brits taking their vacations in the UK has grown vastly since the announcement of the “roadmap out of lockdown” in early 2021.

In January, the BBC reported that the Independent Cottages website, listing more than 1,800 properties, had experienced 300% more enquiries in England than during the first lockdown in March 2020.

Similarly, Camplify, a campervan and motorhome sharing platform, said they had experienced a 209% increase in February, a couple of weeks after the “roadmap” announcement.

This tracks with search terms research by Statista following the lockdown in July 2020. Searches for the term “staycation” increased 511%, while “glamping holidays UK” and “UK staycation” both increased by 404% each.

This is unsurprising, as restrictions have prevented people from heading abroad as much as they’d ideally like.

Factored into this is the similar concern of getting stuck in a red-listed country if rules and restrictions change while UK holidaymakers are abroad.

As a result, if this demand were to continue into 2022, this could be a great time to invest in a UK holiday rental property.

Demand may drop as international travel opens up

One point that’s well worth keeping in mind if you’re considering a holiday BTL in the UK is that international travel will likely open back up at some point, even as early as 2022.

Staycations have been popular while Brits have been unable to go elsewhere. But, once international travel fully reopens and restrictions are no longer a concern, holidaying at home may become less frequent.

On the other hand, that does also mean that you may be able to cash in on travellers from other countries once they’re allowed into the UK without having the same concerns over rules and restrictions.

According to the Office for National Statistics (ONS), overseas residents spent just £6.2 billion on visits to the UK in 2020. This is a reduction of 78% compared to 2019.

That means there are billions of pounds for overseas tourists to spend in Britain, even when UK residents start heading abroad again.

Work with us

If you’d like to find out how to buy a UK holiday BTL in the most cost-effective way, please get in touch with us at Edinburgh Mortgage Advice.

Please email [email protected] or call 0131 339 2281 to speak to us.

Please note

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Buy-to-let (pure) and commercial mortgages are not regulated by the FCA.

Think carefully before securing other debts against your home.

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