Summer may be a distant memory but what is still fresh in our minds are UK holidays and rediscovering what our own country has to offer. The staycation, as it’s been rebranded, has also left a lasting impression on the property rental market in 2021, with short-lets, holiday lets and Airbnbs returning some head-turning yields.
While international travel may become easier from November, the global pandemic still feels balanced on a knife edge and the thought of travel corridors closing with little notice will keep the UK in demand. So how is the holiday let market performing after another staycation season? LandlordBuyer takes a look.
Holiday rents hold strong
When forecasting returns for summer 2021, Sykes Holiday Cottages predicted an average holiday let income through July and August of £9,500 – a 56% rise on the average summer income from the same period in 2019.
The South East and the South West were the regions that tolerated the highest weekly rents. Analysis by holiday let mortgage provider Hodge found it costs an average £1,910 a week to stay at a property in South East England, followed by the South West, where a week’s stay costs £1,769.
Countryside & coastal hotspots
Outside of these areas, Norton Finance named Snowdonia National Park and the Lake District as the top investment locations. It used a formula that combined property prices, average monthly rental prices, gross rental yields and Google search data to identify holiday investment hotspots.
Coastal resorts booked up fast in 2021 but the runaway rents need careful balancing in places where house prices are peaking (Salcombe in Devon, Sandbanks in Dorset and Padstow in Cornwall are the UK’s most expensive seaside resorts, where average prices top £616,000). Investors could look at Parkdean’s Seaside Holiday Home Index for alternative locations. It identified Swansea as the best and most affordable seaside town in which to buy a holiday home, with an average house price of just £146,657.
City breaks steal the yields
Cities shouldn’t be overlooked by holiday let investors. Analysis by hotel room platform, Hoo, found the best city rental yields can be found in Glasgow (7.2%), Belfast (6.2%) and Newcastle (5.6%) – returns that sit above the overall rental market yield of between 5.43% to 5.6%, which has been charted by Paragon Bank since 2016.
Need extra convincing to switch to staycation lets?
Holiday accommodation is an attractive investment proposition even before you look at the income. They can give landlords far more flexibility than traditional property investments. Not only can the owner block weeks out so they can use the property for their own vacation, there’s less chance of eviction issues, money paid upfront to avoid rent arrears and more freedom to sell up when it suits.
Sell your buy-to-let & swap
If the inability to sell your traditional buy-to-let is stopping you purchasing holiday accommodation, talk to LandlordBuyer. We buy all types of rental property for cash, giving landlords control of their next move. Our day-to-day purchases include lets with sitting tenants, rentals where rent arrears have built up and short lease properties.
In fact, if you’ve seen the perfect holiday home for sale and need to sell property fast to make the switch – even in the midst of a tenancy. LandlordBuyer will make you a quick cash offer, with money in your account within seven working days.
Our professional buying service will leave you free to chase holiday let yields, wherever they are in the country and whatever stage you’re at with an existing buy-to-let. Contact us today - we look forward to hearing from you.