HAVE you ever fancied letting a holiday home? Now could be the time to open your door to visitors. Demand for high quality holiday properties is increasing. In high-demand areas such as North Wales, property prices generally remain below the national average. With interest rates likely to remain low (any base rate increases are likely to be modest), and holiday lettings attracting a favourable tax regime compared to residential letting, running a holiday home is increasingly attractive to many people.
Holidays in the UK are more popular than ever
The tourism industry is now worth more than £137 billion to the UK economy. According to North Wales Holiday Cottages, the longest established holiday letting agency in Wales, new, high-profile visitor attractions and continuing security fears over travelling abroad are fuelling domestic demand. This means good quality properties in attractive locations are highly sought after.
North Wales is right at the heart of VisitWales’ current “Year of Adventure” marketing campaign, with world-leading attractions such as zip wires and inland surf lagoons helping to boost the region’s profile here and abroad.
David Griffiths of North Wales Holiday Cottages says: “Demand is high and is spreading into the shoulder and winter seasons. Competition is still hot, though, so position, pricing and presentation are still the essential ingredients to get right.
“People are willing to pay more but they expect more too. Owners need to provide WiFi – unless theirs is a “get away from it all” offer, high quality fixtures and furnishings and little extras like welcome packs or flowers. Aim to get repeat visitors and good online reviews.”
The route to owning a holiday home
The latest Census figures show that more than 1.6 million people in England now own a second home. Yet there are many routes to holiday home letting.
Historically, diversifying farmers turned redundant buildings into holiday homes to earn much-needed income. Disused farm buildings still come onto the market. Yet appealing areas like North Wales attract higher-than-average numbers of retired, so potential holiday lets are as frequently inherited as bought.
Owners coming to North Wales Holiday Cottages tend to be a mix of existing second home-owners looking to earn extra income, recent beneficiaries of inherited property and buy-to-let investors. Unlike many residential landlords, the latter tends to be more for personal investment and enjoyment, as David explains: “People can use the holiday let themselves, for family and friends. For many it’s a nest-egg, a potential future home to retire to or part of pension planning.”
Things to consider
Whether you’re looking to buy or considering to holiday let a property you already own, it’s important you do your research.
- Location Location Location: Speak to local agents, spend time in the area (many holiday-letters tend to know an area through holidays or visits to family and friends), look at what’s around you and consider distances by foot and bike, not just car
- Size and type of property: Number of bedrooms will dictate who you attract – a six-bedroom house will put off couples while a one-bedroom bolthole won’t suit families. Private outdoor space is good to have
- What’s nearby: Pubs in walking distance are a good sell but not often feasible. Isolation can be an attractive too but nearby attractions will always help make a property more appealing to visitors
- Laws and taxes: Know your obligations. Speak to a letting agent local to the area (they’ll have the best knowledge of any local taxes such as Council Tax), specialist accountant or insurance broker. They’ll be able to advise you on the current rules of holiday letting, as well as any planned changes in legislation
“The advice is the same now as it’s ever been – consider everything carefully,” David says. “Be realistic and factor-in potential cost increases like interest rate rises. Get financial advice and if you are buying, buy within your means.
“A well-run holiday property in the right place should cover its costs and possibly earn you a small income, but don’t go into holiday letting thinking you’ll get rich.”
What does it take to be a holiday home owner?
One of our owners from South Manchester bought and renovated a 1,000sq ft ground-floor apartment of a Victorian house in Llandudno, the “Queen of Welsh Resorts” in 2014. It took a year to renovate the property to a specification that includes original sash windows with double glazing, oak floors and polished marble tiles. Special touches include slippers and robes and two large smart TVs that visitors with accounts to subscription TV services such as Amazon Prime or Netflix can “install” and watch.
The two-bed en-suite garden villa is in a prime residential position just a stone’s throw from the town centre and attractions on the Great Orme and lets for £1,100 a week in High Season.
“Compared to a residential letting where I might get returns of £750 in August, I could earn £3,000 for a holiday let,” the owner explains. “That and the fact you don’t have residential tenant rights to consider makes holiday letting an attractive form of investment.”
He maintains running a holiday let is neither stressful nor time-consuming, though his operation is a well-oiled machine. Marketing and booking management is handled by North Wales Holiday Cottages. A local maintenance contractor takes care of any emergency repairs 24/7, a cleaner services turnarounds and there are three lots of Egyptian cotton towels and linens on rotation via a nearby launderette. He and his wife take care of bookkeeping duties.
“We don’t understand stocks and shares and interest rates are low so the best, safest investment is in bricks and mortar,” he adds. “But you have to get the important details right – position, price and presentation, and make sure you have excellent marketing visibility.”
What’s on the market in North Wales now?
A one-bed traditional slate cottage with low maintenance outside areas in the rural village of Penmachno. This is a great spot for accessing Snowdonia and a wonderful moorland drive takes you to Porthmadoc, the gateway to the Llyn Peninsula.
£99,950 with Iwan M Williams
A modern, 3-bed end terrace marina residence with wonderful views over the marina and an unbeatable location, within walking distance to Conwy castle and the historic walled town.
£265,000 with Coast and Marina Properties
If you’d like free, impartial advice, call North Wales Holiday Cottages on 01492 582492 or email us here.