UK: With the shadow of Brexit impacting on travellers’ wallets and their options, mortgage lenders are expecting to see a rise in holiday let investment.
85 per cent of brokers in the UK are predicting a rise in applications for holiday let loans, with 29 per cent of those expecting that to be significant.
Simon Lindley, chief development officer at Cambridge & Counties Bank, said: “The UK is very likely to become a much more attractive holiday destination and one result is an expected boom in demand for quality UK holiday lets.”
For some, the furnished holiday letting market provides a strong tax incentive for those seeking additional properties in the UK. Mansion Global notes that the tax on a commercial FHL property is immediately halved from its regular counterpart, in addition to exemptions on council tax, allowances to buy furniture, and lower capital gains tax on future sale.
The closing of traditional tax loopholes on large properties means that FHLs are becoming sought-after options for landlords seeking greater tax relief. However, the impact of Brexit is making investment look promising for a number of reasons.
Firstly, the fall of the pound relative to other currencies has made staycations a more desirable holiday choice for most Brits. Two thirds of brits planned their summer holidays in Britain in 2019, up 12 per cent on the previous year, with concerns of travel disruptions and high expenses being listed as primary reasons.
Secondly, the desire for staycations in combination with the fall of the pound have made the market for property investment more desirable. 28 per cent of Brits have said that the decision to leave has made them purchase holiday property sooner, with 45 per cent of mortgage lenders defining Brexit as the principal cause for mortgage increases.
This continues the trend from this summer of holiday let investment demand, with similar reasons being listed. One major concern financiers have seen though is a lack of tailored services for this market though, with almost two thirds saying products needed to be more tailored to particular needs.
2020 is still early, but with finance demand projected to be high, the holiday let market should rise to meet it.