Demand for self-catering properties on the rise: Seven golden rules of buying and renting out the ideal holiday park home
- Choose location and property carefully
- Equip it properly with families in mind
- Use a letting agent
After years of belt-tightening, this year is seeing a renaissance in one housing market sector: buying a holiday home is back in fashion.
The surge in interest applies not only to mainstream holiday cottages, of which there are about 500,000, but also to specialist park homes, of which there are 330,000. In both cases, buyers need guidance on what and where to buy — and, if they want to make their new home earn its keep, advice on how to let it.
In November, research by the London School of Economics for rental agency HomeAway concluded that demand for self-catering holiday properties was on the rise, contributing £4.5 billion to the UK economy.
Growth sector: £550million a year is spent on new park homes and pitches, like those at the Haven Holidays site at Devon Cliffs in Exmouth, where homes start from £17,995.
Meanwhile, more than half of Britons take at least one holiday on a park home site in their lifetime, according to the British Holiday & Home Parks Association. It says £550million a year is spent on new homes and pitches.
If you want a slice of this booming business, there are seven golden rules to follow.
1. Choose the right location
Devon and Cornwall, East Anglia or the Cotswolds are great options.
These areas have rental seasons of 16 to 20 weeks in the summer. But buy a holiday park home somewhere like White Cross Bay at Windermere in the Lake District or at Rivendale in the Peak District and you may get year-round rentals from walkers.
If you have a cottage, you could let for every day of the year, but for holiday parks, local rules will apply, normally insisting the property is not rented out all the time.
2. Choose the right property
If you are buying just for yourself, a park home or small cottage may be perfect. But if you buy to let out, the properties most in demand are those with views of the water, such as the homes in Haulfryn's Aberafon park in Wales, which overlook the sandy Llyn Peninsula (haulfryn holidayhomes.co.uk).
Homes sleeping four to eight are most in demand by families and groups, but flats are hardest to let.
'Light, bright spaces that make the most of the view with expanses of glass have become popular,' says Richard Speedy, of agency Strutt & Parker.
Buy a holiday park home somewhere like the Lake District and you may get year-round rentals from walkers.
3. Fit the right equipment
'Pay attention to accommodation ratios. For example, if you're expecting groups to rent, make sure you have enough bathrooms.
'Downstairs facilities are useful, too, such as a shower, drying room and utility space,' says James Greenwood, of Stacks Property Search & Acquisition.
Outside areas do not have to be big, but enough space for a barbecue and alfresco eating are a must — and plenty of park homes sites, such as Haven's Riviere Sands overlooking St Ives Bay, Cornwall, offer these (haven.com).
4. Use a letting agent
Holiday park operators usually handle lets, but it's different with a cottage.
Rather than try to keep up with health-and-safety laws, get keys to clients, clean the house and handle emergencies, you should hire a letting agent. Their fee, often 20 per cent of your rent, is tax-deductible.
5. Budget responsibly
Factor in time without rent and remember that furniture and white goods may need replacing every two years.
An annual redecoration keeps the property fresh and appealing, too.
6. Get insurance
Good owners buy property and contents cover plus public liability insurance, typically up to £500,000. The Association of British Insurers say legal claims are incredibly rare, but it's not worth taking a risk.
7. Tax benefits
Tax rules have changed. For a park home or cottage to be considered a Furnished Holiday Letting — the most favourable tax status — it must be available for rental by the public at least 210 days per year and occupied for at least 105 days per year.
You can also offset expenditure such as furniture, basic wear and tear and professional fees.
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