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England sees 20 per cent jump in second homes “flipped” to holiday lets

UK: Analysis of government figures by real estate advisers Altus Group has revealed the number of holiday homes trading as businesses has grown by more than a fifth since the start of the pandemic.

More than 11,000 second homeowners in England have “flipped” their properties to become holiday lets. The data shows 67,578 homes classified as holiday homes have been switched to become commercial premises, compared to 56,102 properties in March last year.

Almost 4,000 of these homes are in south-west England, amid record visitor numbers in Cornwall and Devon. The south-east has seen a 27 per cent rise – or 1,458 properties.

Transforming second properties into holiday lets has helped secure additional income for owners during the pandemic, but could also be beneficial for tax reasons. Holiday homes were entitled to grants last spring worth £552 million to support non-essential retail, hospitality, leisure, personal care and accommodation sectors. Top-up grants worth a further £257 million were made available in January, due to the third national lockdown.

Around 96 per cent of holiday homes in England are covered by the small business rate regime, so pay little to no property taxes. However, the government announced in the March Budget that it planned to legislate to tighten tax rules for second property owners in England, meaning they would only be able register for business rates relief if their properties were genuine holiday lets.

Robert Hayton, UK president of Altus Group, said: “The grants for second homeowners will have been far more lucrative than ‘business as usual’ for many, especially in the off-seasons, whilst there is a pivot towards holiday lets as rental prices boom in hotspots.”

 

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