Why Holiday Lets Are Great Investment Opportunities

by Charleston Financial

If you are interested in exciting investment opportunities right here in the UK but want an alternative to buying to let, then now might be the best time to consider a holiday let investment. Since Brexit and the ongoing Covid-19 pandemic, holidaying in the UK has become increasingly popular. Even as restrictions are lifted, due to the confusion and ever-evolving rules and regulations about foreign travel, lots of people still want to stay on British soil for their holidays.

What makes holiday let investments such a good option? 

Potential to Make More Money

One of the most important reasons for considering holiday let properties is the chance to earn more money from it than the alternatives simple buy to let options.

As an estimate, you can potentially earn the same from holiday makers spending a week in a holiday let property during the peak season than you could to a tenant for a month’s worth of rent in a buy to let property.

Tax Benefits to Holiday Lets

This is where it gets interesting because one of the reasons many people are put off buy to let investments is because of the additional taxes they are expected to pay. However, when you invest in holiday let properties, there are major tax benefits. Although it would be hard to put a figure on things, it's worth highlighting that the HMRC classifies holiday lets as businesses. Something they don’t with buy to let properties (unless the buy to let is a limited company buy to let)

What does this mean?

You could be able to claim for mortgage interest tax relief instead of the tapered allowance offered to landlords at the moment. Which will make it easier to afford a holiday lets mortgage.

It's relatively easy to qualify for this tax relief. Your property needs to meet the criteria as an FHL (furnished holiday let) and be available for letting for a minimum of 210 days every year and let out on a minimum of 105 of those days.

With holiday lets you are usually able to claim all of the ongoing expenses of your holiday let such as maintenance costs, bills, and buying replacement domestic items.

If that wasn’t enough, you may even benefit from Inheritance Tax and Capital Gains Tax allowances depending on the way you operate your holiday let property.

Restricted Tenancy Rights

Another problem that landlords face is dealing with tenants, who have a lot of occupancy rights under normal circumstances like assured shorthold tenancy agreements. With holiday lets, tenants have very restricted rights, which means you will not have to deal with the problem of tenants who refuse to move out. Another huge bonus is that holiday let tenants often pay in advance.

You Can Use the Holiday Let as a Holiday Home

One added benefit we want to highlight is the fact that, lender permitted (discuss this option with your Charleston Adviser) you can actually use your holiday let property yourself as a holiday home. Something you are not able to do with a conventional buy to let mortgages.

In order to discuss the range of holiday let mortgages available through Charleston, please call our new business team on +441908972491.

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