17% of UK adults contemplated buying a holiday let property during the pandemic, according to new research from Suffolk Building Society, which found that younger people are leading the trend, with those aged 18-34 most likely to have thought about buying a holiday let property within the past 24 months.
Two urban areas had the highest number of prospective landlords, with those living closest to London at 32%, followed by people in the West Midlands (19%).
This increased interest in holiday let properties is mirrored at Suffolk Building Society, with both the volume of and total value of, completions for new holiday let purchases doubling between 2020 and 2021.
Location is important for holiday let landlords
The setting of the property was more important than other factors such as renovation potential, or proximity to amenities, for potential landlords. The key aspects for wannabee landlords when considering buying a holiday let were:
A property that is in or near beautiful scenery (31%)
A property that is near the beach or coast (30%)
A property that is easy to manage and doesn’t require much upkeep (28%)
A property that is in an area that the landlord already personally knows or loves (27%)
A property that is in a popular tourist or holiday destination (23%)
Charlotte Grimshaw, Suffolk Building Society’s head of intermediary relations, said: “Our research shows that the younger demographic in particular, are considering a holiday let future, potentially opening up a very interesting new client group for intermediaries, but it will be important to check they have realistic expectations, with many lenders’ criteria including minimum ages and a requirement to already be a homeowner. Brokers can play an important role here in helping prospective short term landlords assess their options.
“As part of the discussion around holiday let criteria, this may even include signposting clients down the buy to let route as a means of gaining additional income and experience with longer-term tenants before borrowers branch out to holiday let later down the line.”
A holiday let is for life not just for the pandemic
Of those who expressed their interest in becoming a holiday let landlord, almost a third, (32%) said Covid-related restrictions inspired them to look into holiday lets, however, half (50%) claimed it was always part of their plan.
Devon and Cornwall were the locations that most wannabee holiday let landlords were considering, followed by the Lake District, Peak District and Yorkshire Dales.
Charlotte continued: “Before potential owners jump on the holiday let bandwagon, intermediaries may also want to educate their clients about the nuances of lenders’ criteria, making them aware that not all lenders will allow them to market their property on short-term lettings sites such as Airbnb and Vrbo, or that properties in holiday parks, caravans or lodges, and those of unusual construction method may not always be accepted, for example.
She concludes: “It’s easy to understand why the idea of owning a holiday let home is so attractive. As people were limited to holidaying in the UK, often within an area they know and love, their eyes were opened to the opportunity of increasing their income, as well as enjoying a property for personal use too. However, intermediaries should also advise their clients to take the time to understand the market, and check out the competition before falling in love with a property that isn’t viable in terms of lettings.”
