With a rising number of Brits choosing to turn their backs on airport queues and the current poor exchange rates, and instead opting for holidays in the UK, the staycation/furnished holiday let market in Britain is unsurprisingly thriving.
The UK has also been witnessing an increasing number of foreign tourists, drawn to its cultural, historic and sporting landmarks, chocolate box towns, lively cities and scenic green space on offer in locations like the Lake District, Peak District and Yorkshire Moors.
Cities such as London, Bath, Bristol, Oxford, Liverpool, Manchester, Cardiff, Belfast, Glasgow and Edinburgh are particularly appealing to visitors – domestic and overseas – while Cornwall, Devon, the Highlands, Snowdonia and parts of Northern Ireland’s coastline have long drawn the tourist hordes.
In other words, the UK has lots on offer for those who are keen to stay put – whether for financial, environmental or other reasons.
With this in mind, leading international property agency Spot Blue International Property has outlined its top eight reasons why 2020 could be an ideal year to invest in a furnished holiday let on home soil.
A flourishing staycation market
According to VisitBritain, domestic tourism accounts for nearly 80% of all tourism activity in the UK, while around £72 billion is spent every year by domestic tourists, or 'staycationers', just in England alone.
The increasing popularity of short breaks is also especially noticeable, with VisitBritain finding that 35 million overnight holidays were taken between July 2018 and July 2019, up 2% on the same period the year before.
Rising inbound tourism
As well as a growing domestic market, there are also more overseas visitors coming to the UK, bringing in revenue and creating a larger market for tourist accommodation. VisitBritain says the number of overseas visits to the UK is projected to rise to its highest level ever this year, reaching 39.7 million, 2.9% higher than 2019.
In a possible sign of things to come, August 2019 was the highest month on record for both inbound visits to the UK and overseas visitor spending.
With consumers increasingly aware of the environmental and social impact of their holidays, it’s no surprise that last year saw concern about climate change step up a gear so that today it’s one of the most prominent global issues.
Spot Blue says 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, the most modern holiday properties also tend to have very low carbon footprints, thanks to their construction process and energy-saving qualities once built.
No need for 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 overseas but staying put in the UK gets rid of that burden, removing any need to exchange money and constantly search for the best rates.
For property buyers, meanwhile, not being exposed to currency movement makes a purchase far less stressful, compared to buying abroad.
In most cases, 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.
Spot Blue also points to how having a car means people can be more flexible with dates, as well as arrival and departure times, while bikes can be packed in the back or on a roof rack. What’s more, travelling by train or coach is typically a more viable option when staying within the UK.
Spot Blue says holiday home developers in the UK are offering attractive terms to investors and lifestyle buyers.
The company itself is offering new furnished holiday let homes that are mortgageable and come with the option of a 7% annual net return, with rental income paid quarterly. All of which could make for an appealing hands-off investment proposition for the right buyer.
A major advantage 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 result.
As a guide, they attract capital allowances, which can be applied to furnishing the property, while most of their running costs are tax deductible. What’s more, 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.
No language barrier
“Not speaking the local lingo does still put some people off holidaying abroad, which makes staying in the UK more appealing,” Spot Blue says.
“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.”
We previously looked at whether furnished holiday lets will spearhead the UK’s green revolution in 2020, while this guest piece from Iain Brown at Aria Resorts analysed why the sun was shining on furnished holiday lets in 2019.