Brexit and the fall in value of the pound are making UK holidays more attractive to Brits and it would seem investors are keen to cash in on this market.
According to a survey by Cambridge & Counties Bank, 85% of mortgage brokers are forecasting an increase in demand for specialist loans designed to help investors buy holiday homes to let in the UK.
As many as a third of these brokers predicted this rise to be ‘significant’ as investors take advantage of economic factors which are currently working in their favour.
Favourable taxation
Indeed, the reasons for the boom in this industry are not just related to Brexit and the pound. Experts think the favourable tax situation for holiday properties and a rise in both foreign tourists and Brits choosing to take their holiday in the UK could prove fruitful for anyone in the holiday let business.
What’s more, said Cambridge & Counties, many of the brokers it quizzed also believed holiday lets offered better yields than traditional buy-to-lets.
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.
“The specialist lending market for this sector has historically been underserved but Cambridge & Counties Bank is focused on leading the market and we firmly believe our product provides a dedicated solution in the UK.”
Too few lenders
At the moment few lenders offer mortgages for borrowers keen to invest in the holiday home market. You cannot use a residential mortgage for this purpose and therefore your options are limited to a specialist area of the buy-to-let market.
Nearly half of brokers taking part in the survey thought there was not enough competition in this market but that it was ‘ripe’ for new entrants.
Many thought the income required to be accepted for these mortgages should be relaxed and others thought terms should be relaxed.
But with the majority thinking this market will grow over the next 12 months, it’s worth watching this space if you are interested in investing in holiday lets.
For a more detailed look at the pros of holiday let investing, click here.
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