Staycations remain popular
Our latest research has revealed that the average Brit is preparing to take a total of three staycations this year, with concerns for the environment (18%) and foreign conflict (17%) putting some people off jetting abroad.
With this in mind, investing in a holiday let this year could offer a great return, as you’ll be able to tap into this staycation demand.
Additionally, you could encourage travellers to give back to local economies who are still recovering post-pandemic, including independent restaurants and shops.
There are plenty of places to invest
When it comes to choosing where to invest, the UK isn’t short of amazing destinations.
We’ve found Cornwall is topping people’s wish lists as the number one location they plan to visit, while regions such as the Scottish Highlands and Devon are continuing to attract visitors.
Yorkshire and the Isle of Wight also feature in our top five list of popular destinations, while the Scottish Borders and the southern coastal county of Dorset, both renowned for their dramatic landscapes and beautiful walks, are climbing the ranks.
Travellers are choosing short breaks over foreign travel
Recently, we’ve seen a rise in travellers booking staycations last minute or choosing long weekend breaks over seven-night stays to manage their budget.
If you choose to invest in a holiday home this year, accepting late and short-term bookings will appeal to those who are facing squeezed finances.
You could access holiday let tax reliefs
As some holiday lets are identified as businesses, you could be eligible for a number of tax benefits if you take the leap into investing dependent on where you live.
The type of holiday let tax relief opportunities include mortgage interest tax relief, Small Business Rates Relief, and potentially Business Asset Disposal Relief, all of which will significantly reduce the taxes payable on your holiday let profits and return on your investment.
You could also access other tax relief if your property is classed a Furnished Holiday Let (see here), including capital allowances on furniture, furnishings, and equipment you purchase for your holiday home. Additionally, you may even be able to claim on certain renovation costs such as plumbing and wiring.
There could be new legislation in 2024
In 2023, we saw concerns emerge regarding the potential impact of short-term lets on the UK housing market, prompting the introduction of further regulation.
At Sykes, we’re in support of the creation of a national register to provide all governments with more concrete figures about the size and impact of the sector on housing supply, compared with e.g. the number of empty homes, but whether this will be introduced is still to be confirmed.
Short-term lets truly are the economic lifeblood of many parts of the UK and a register is needed (to show where they are, how many, whether whole property or a room in someone’s main home or a yurt for example) before any further regulation risks unforeseen negative impacts on communities, owners, and visitors alike.
However, no matter what the changes are, we’re here to guide holiday homeowners through the next steps of their holiday letting journey.
For more information on investing in a holiday let, check out our blog post: https://www.sykescottages.co.uk/letyourcottage/advice/article/why-are-holiday-lets-a-good-investment
Or, to find out how much you could earn from a holiday home, try our income calculator: https://www.sykescottages.co.uk/letyourcottage/advice/earnings-calculator
* Ben Edgar is head of regulation and policy at Sykes Cottages *
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