Daily Mail, Wednesday, August 7, 2019 Page 35
Editor: VICTORIA BISCHOFF
Money Mail http://www.thisismoney.co.ukcosts and advertising. And you
can take into account some or all
of the value of furniture and essen-
tial fixtures and fittings.
To qualify for the tax relief, your
property must be classified by HM
Revenue & Customs (HMRC) as a
Furnished Holiday Let. This
means your property must beavailable to let by paying holiday-
makers for at least 210 days a year,
and lettings must have been
agreed for at least 105 of those.
As a second homeowner, you will
be liable to pay an additional 3 pc
in stamp duty when you purchase
a holiday let if you already ownanother property. But experts say
you can typically earn more from a
holiday let on a weekly basis than
with a buy-to-let property with a
fixed monthly rent. In the peak
summer months, for example,
owners can charge upwards of
£1,000 a week for a house. RebekahEngland, head of property at Mul-
berry Cottages, says: ‘Your guests
are looking for something bigger
and better than their own home,
so owners have to get creative if
they want to earn the best rates.’
She adds that online customer
reviews also dictate how muchyou can charge. In the first year,
you won’t have many reviews,
which means you need to price
competitively. But if your feed-
back is positive, you should be
able to charge more in the follow-
ing 12 months.
A yearly increase of 5 pc to 10 pc
is typical until you reach the limit
for your area, says Ms England.
Holiday let hotspots are York-
shire, the Lake District and the
South-West, according to Leeds
BS. The Cotswolds is a popular
destination with Mulberry Cottages
customers, while cities such as Liv-
erpool, Edinburgh, Glasgow, Bath
and Cardiff do well on Airbnb.
Ipswich BS launched its range of
holiday let mortgages this week,
after local experts told the mutual
they were receiving a high demand
for finance to buy holiday cottages
in the rural and costal areas of its
heartland in Norfolk and Suffolk.
For the best chance of keeping
the property occupied, advertise
it online; Mulberry Cottages says
70 pc of its bookings are made
over the internet. Popular sites
include Airbnb, HomeAway, andR
ETIREES looking to top
up their pension are
flocking to the holiday let
market. Many are hoping
to cash in on the boom in
UK tourism, while generous tax
perks are tempting landlords
struggling to make a profit from
buy-to-let.
The number of people booking self-
catering holidays in England jumped from
6.22 million to 7.23 million between 2015
and 2017, according to Visit England.
The recent fall in the value of the pound
amid Brexit uncertainty is also expected
to boost the appeal of the ‘staycation’.
It means luxury cottages, apartments
and quirky cabins are more sought after
than ever. Holiday homes provider
Cottages.com told Money Mail it has seen
a 25 pc year-on-year rise in the number of
owners registering properties on its web-
site. Most are first-time investors, while an
estimated one in three are retirees.
Leeds Building Society has also seen a
19 pc rise in applications for holiday-let
finance in the first six months of the year
compared to the same period two years
ago. More than a quarter of borrowers
were aged over 55.
Meanwhile, Ipswich Building Society
says mortgage brokers in its area had
reported such a high demand for holiday
cottages in Suffolk, Norfolk, the Essex
coast and Cambridgeshire that it has
now launched its first range of holiday
let mortgages.
So should you consider investing in a
holiday let?
Increasing numbers of landlords are flee-
ing the buy-to-let market after their prof-
its were hit by stringent new tax rules
phased in from 2017.
As of 2020/2021, investors will no longer
be able to deduct all the interest they pay
on their mortgage from the rental income
they declare to the taxman.
They will instead be able to claim a 20 pc
mortgage interest tax credit. But many
higher earners may find that they no longer
break even. Landlords can also no longer
write off some of their tax bill for ‘wear and
tear’ to their property.
But because holiday lets are classed as a
business rather than investment, owners
are still entitled to many of the tax advan-
tages landlords no longer get.
For example, you can deduct the cost of
your mortgage from your profits before
calculating how much income tax you
must pay. You can also subtract expenses
such as council tax, utilities, maintenance,
cleaning costs, property managementBy Samantha
Partington
holiday lets
could be a
lucrative
Why
TURN TO NEXT PAGEhoW to
cash in
haven
for your
savings
The buy-to-let crackdown and
staycation boom means there
has never been a better time to
invest in a British holiday home
LOCATION will dictate how
much you can charge.
Properties near the coast,
national parks, and conser-
vation and rural areas a
two-hour drive from cities
are popular.
Stand out from the crowd.
Barn conversions, log cab-
ins, a lock-keeper’s cottage
or Art Deco homes will grab
families’ attention.
To earn good reviews, a
high standard of décor, linen
and cleanliness are a must.
Your property should be
easy to find online. Include
the name, style and location
in its description, number of
beds and features such as
whether it is pet-friendly.
Speak to a tax expert about
what costs you deduct from
your lettings income.Holiday haven:
St Ives harbour
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