A Look Back
Back in July of last year, we launched holiday let lending, prompted in part by the effects of the covid pandemic.
The challenges and restrictions brought about by the pandemic led many people to rethink certain aspects of their lives including how, and where, they take their holidays – with a well-publicised surge in the number of staycations.
That in turn created a potential investment and income opportunity for those looking to purchase a holiday rental, or an alternative option for existing landlords looking to reshape their portfolio.
After nine months of lending in the holiday let space, we were keen to look at the data behind the applications that had been placed with us and to try and learn a bit more about our borrowers and their potential new properties.
Locations
Having plotted the locations of properties on the map, it’s no surprise to see that many of them are situated in coastal areas – who doesn’t love a break by the seaside? But what is interesting, is the wide variety of the locations, with properties dotted along the coast of England and Wales.
While there are clusters of properties in some of Britain’s best-loved coastal areas, such as Cornwall, Norfolk and Pembrokeshire, that diversity is a reminder that in the UK we really are blessed with an abundance of stunning seaside settings.
It’s not just the lure of the seaside, however, which influences where holiday let landlords are purchasing their rentals. The map shows a large number of inland properties and demonstrates that the bucolic beauty of the Cotswolds, the stunning scenery of the Peak District and the fascinating history of cities such as Bath, remain great draws for a staycation.
While the location of properties was pretty diverse, the map showing the postcodes of those placing the applications tells a different story. The majority of applicants live inland, with a significant cluster in and around London.
Our Products
This may suggest that many applicants are choosing properties in seaside destinations that they can use for their own getaways, and our holiday let criteria may have had a part to play in influencing those decisions. With our holiday let products, personal use is permitted for up to 60 days per year, giving owners plenty of opportunity to benefit from a getaway at their property.
Also, as we don’t accept limited company applications and only allow borrowers to own up to two holiday let properties, most of our holiday let owners are unlikely to be professional landlords. Which again suggests that using the property for personal use will be a key consideration.
Practical Benefits
Finally, it’s worth noting the clusters of applicants who live in Norfolk and Cornwall, as well as those spread out along the south coast. While the thought of owning a bolthole to escape to is likely to be a key driver for many applicants, for those who already live close to the coast, a holiday rental on your own doorstep provides many practical benefits.
Holiday lets tend to be more expensive to run and maintain than the average buy-to-let property, although rental yields are generally higher. If landlords are able to check in guests themselves, clean the property after each booking and carry out basic maintenance this can drastically reduce costs and maximise their return on investment.
Find out more about our
holiday let products.