Are staycations here to stay?
By Penrith Building Society
Disruption and uncertainty around travel brought on by COVID forced people to look closer to home for their getaways. Travelling abroad is now an option and operators are trying to tempt people back on cruises, flights and reacquaint themselves with the delights of an overseas holidays. However, the popularity of staycations represents a real shift in attitudes. Have people truly changed their ways for good? If the UK holiday market is as buoyant as ever, what does this mean for current or prospective holiday let landlords?
The Sykes Cottage Holiday Letting Outlook Report 2022 reports that bookings for their UK holiday lets in 2022 is currently up 35% compared to pre-pandemic levels. And it’s not just the coast and rural areas seeing a surge in demand. In 2022 and beyond, it is expected that a return to larger cities will also contribute to this growth, with city breaks and trips to major sporting events or festivals returning.
Graham Donoghue, CEO, Sykes Holiday Cottages, said, “The shift towards staycations had already begun pre-pandemic, Covid has just accelerated this trend. And although international travel is becoming easier, we now have new types of staycationers that are here to stay.
“The figures speak for themselves – bookings so far this year are up 35% compared with 2019 and the average income of a holiday let owner grew by almost the same amount last year versus 2019 – demonstrating the incredible investment potential that holiday letting can bring.
With this demand comes opportunity for you and your clients. Sykes’ report provides an insight into the makeup of their holiday let owners. Whilst 4 out of 10 people were about to buy their holiday home outright, the remainder either inherited their property or had to finance the purchase with some sort of secured loan – be it a holiday let mortgage or capital raising on another property.
The availability of specific holiday let mortgages continues to grow. Mainly high street and specialist lenders now have a holiday let product. This increased competition leads to innovation. Situated on the edge of the ever-popular Lake District, Penrith Building Society have drawn on their experience and knowledge of this sector to design a product that is available to first time buyers, first time landlords, non-owner occupiers and expats.
Like the rest of the UK property market, supply continues to be an issue. Faced with this challenge, many people are thinking of innovative ways to take advantage of the staycation boom. Sykes’ survey reports that 18% of people turned part of their own home into a holiday let. If you have clients looking generate holiday let income from their existing home then bear in mind that lenders may permit this within certain restrictions.
Recognising the popularity of using part of your existing property to generate a holiday let income, Penrith Building Society recently launched a ‘multi-unit’ mortgage product which permits clients to let up to 60% of their home on a holiday let basis. This enables clients to supplement their income without necessarily taking on an additional property or large mortgage.
The shift towards staycations had already begun pre-pandemic, COVID has just accelerated this trend. And although international travel is becoming easier, it would appear that the UK holiday let market is showing no signs of letting up.
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