Commercial Finance Is Here To StayCation
The last 2 years has seen a significant expansion in the Holiday Lets, StayCations and Short Term Lets market, accompanied by a total shake up in how the market works.
So there’s a far broader range of types of property, and Short Term Let stays are booming alongside traditional holiday breaks.
And the boom in the sector is not forecast to fall away with the re-opening of foreign travel – and international travel brings tourists into the UK needing Short Term holiday accommodation.
Through holiday let agencies, AirBnB, direct advertising and other platforms owners of holiday homes have benefitted from the boom of the last two years’ demand during the pandemic.
But there are several reasons why Holiday Lets could be an ongoing investment opportunity for buyers, owners and BTL landlords:
• Renewed interest and awareness of holidaying within the UK
• Reduced costs and convenience of a StayCation vs. holiday abroad
• Awareness of ‘green’ holidays and reducing carbon footprint could increase demand domestically
• Lenders are adapting to ‘types’ of income – with more including AirBnB bookings and comparable long term let rates in their affordability calculations
• Our lenders will support both experienced Holiday Let owners and first time landlords
Landlords are recognising that Holiday Lets are a way of diversifying their portfolio, with an asset that remains in demand, with a fall back of re-sale or long term let both plausible given current market demand for both.
Holiday Let and Short Term Let properties come in all shapes and sizes – a bit like the luggage that we jam in the car to go on them! And location? It’s no longer exclusively a cottage in the country or on the coast…
• It can still be a holiday cottage, bungalow, house, flat or studio!
• A city or town centre house, flat or studio for work or leisure stays
• A room in any of the above for when there’s just you, or two, and you don’t need the whole pad
And that’s not an exhaustive list!
Clients no longer only rent holiday / Short Term Lets from Saturday to Saturday:
• We book weekend breaks Friday to Monday, and midweek from Monday to Friday
• We book short term stays from 1 night upwards
How we make bookings is changed – and improved I’d suggest?
• Traditional holiday companies and agencies
• Short Term Let booking sites or your own direct website
• Major market players like AirBnB or Booking.com
Again, by no means the limit of ways to book!
And with Affordability, our lending partners have evolved and take all of the above into account when looking at how to support you; they have to evaluate the affordability of a Holiday Let mortgage – and there are as many different ways that lenders do that as there types of booking method, including:
• Estimate future bookings on previous average occupancy and rates
• Agency estimates of rates and occupancy levels
• AirBnB / Booking.com or other major site bookings
• The standard Buy To Let rental value of the property
We can source a suitable lender for the way you take customer bookings.
Short Term Lets are changing the face of the way that we holiday, take a break or just stay somewhere that we don’t call home!
You might also call this Serviced Accommodation and we use it to:
• Weekend break Friday to Monday
• Midweek break Monday to Friday – or just to Wednesday if you like!
• Take a whole studio, flat or house
• Take a room for just you, or could be for two..
People’s motivations for renting Short Term Let accommodation have evolved, and that is shown in the locations they book into. It doesn’t have to be a cottage on the coast, it can be in any setting, from built up to remote:
• Family break or re-charge the grey matter solo trip
• Business and not always pleasure stays
• Gap between sale and purchase in a house move
• During a build or work on where you call home
• City break or country retreat
• Adjacent to a hospital or education site
‘Short Term’ doesn’t have to be a one off stay – a client recently took an 18 week Sunday to Thursday booking for a Studio in his portfolio.
As a BTL landlord letting your property to a Short Term Let accommodation provider could be tempting, no gaps in rental income! OR you could do the letting legwork yourself, direct to clients or via the likes of AirBnB or Booking.com.
Commercial Finance is here to StayCation! Why not book a holiday (let property purchase or refinance) with us in 2022?
Mark Grant, March 2022.