Increasing numbers of Britons are turning their backs on airport queues and today's poor exchange rate, and instead choosing to take their holidays in the UK, which is also benefiting from rising numbers of foreign tourists. Spot Blue International Property outlines its top eight reasons why 2020 could be an ideal year to invest in a furnished holiday let on home soil!
1) A growing staycation market. Domestic tourism accounts for almost 80 per cent of all tourism activity in the UK, according to VisitBritain, and about £72 billion is spent annually by domestic tourists, or 'staycationers', just in England. The rising popularity of short breaks is especially noticeable. According to the national tourist agency, 35 million overnight holidays were taken between July 2018 and July 2019, up two per cent on the same period the previous year.
2) Rising inbound tourism. More overseas visitors are coming to the UK, bringing revenue and creating a larger market for tourist accommodation. According to VisitBritain, the number of overseas visits to the UK is forecast to rise to its highest level ever this year, reaching 39.7 million, which is 2.9 per cent on 2019. A sign of things to come, August 2019 was the highest month on record for both inbound visits to the UK and overseas visitor spending.
3) It's greener! Consumers are increasingly aware of the environmental and social impact of their holidays. Last year concern about climate change stepped up a gear so that today it is one of the most prominent global issues. Holiday homes in the UK are eco-friendly on a number of levels - they not only reduce the carbon footprint of domestic tourists by taking away the need to fly, but the most modern holiday properties have very low carbon footprints, thanks to their construction process and energy-saving qualities once built.
4) No need to buy foreign currency. The exchange rate hasn't been kind to British holidaymakers abroad, not to mention property-buyers, in recent years, notably since the EU Referendum in June 2016. The weaker pound means everything costs more. Staying in the UK gets rid of all that, removing any requirement to exchange money and constantly search for the best rates. For property-buyers, not being exposed to currency movement makes a purchase far less stressful, compared to buying abroad.
5) Easier travel. Most domestic tourists travel by car to reach their destination in the UK. Which means no need to suffer queues or delays at the airport, make transfer arrangements or be at the mercy of airlines and their timetables. Having a car means you can also be more flexible with dates, let alone arrival and departure times, and you can pack the bikes! Travelling by train or coach is also a more viable option when staying within the UK.
6) Investment potential. Holiday home developers in the UK are offering attractive terms to investors, as well as lifestyle buyers. Spot Blue International Property is offering new furnished holiday let homes that are mortgageable and come with the option of a seven per cent annual net return, with rental income paid quarterly. This could make an appealing hands-off investment proposition for the right buyer.
7) Tax benefits. A major perk of properties that qualify as furnished holiday lets in the UK is that they are treated as businesses and come with favourable tax breaks and allowances. As a guide, they attract capital allowances, which can be applied to furnishing the property, most of their running costs are tax deductible, any profit can be used for pension contributions, capital gains tax incurred from them is low, and most will qualify for relief on business rates, while being exempt from council tax.
8) There's no language barrier! Not speaking the local lingo does still put some people off holidaying abroad, which makes staying in the UK more appealing. And for property-buyers, purchasing in the UK where you understand not just the language but the conveyancing process makes things less stressful than buying abroad, which involves getting to grips with foreign conveyancing, putting your trust in a bi-lingual lawyer and having numerous documents translated.
For further information about buying a furnished holiday let in the UK, contact: