What is a Holiday Home?

A holiday home is an additional house or property that is bought for the sole purpose of visiting for holidays or to let out for others to stay in during theirs.

Purchases for these types of properties have become increasingly popular in recent years as a more flexible working regime has been implemented in the UK ever since covid lockdown, with more people being able to work remotely.

Location

One of the most important aspects of purchasing any property, not just a holiday home, is its location. The location of any type of holiday home is always vital as it could be a decisive factor in whether your tenants decide to stay at your premises or if they would ever return.

The importance of your property’s location should be one of the first considerations when buying a property, especially when buying for others to stay there. For example, areas with greater noise pollution tend to be much less desirable to many people, so when spending such a vast amount of money, it is important to take into account the surrounding area.

Specialist Mortgage

When making the commitment to such an extravagant purchase, it is key that the buyer assesses their potential budget. If a holiday home is to be bought using borrowed money, then a specialist mortgage will be required.

Buying Property Overseas

Purchasing a mortgage abroad tends to be more difficult than in the UK, this is a problem that appears to have been exacerbated in recent years by Brexit.

Overseas lenders will likely ask more questions before they will consider lending, particularly to buyers from the UK, with deposit percentages being around 50% of the purchase price.

Buy To Let

When purchasing your holiday home with the intention of letting to tenants, luxury goes a long way to earn your money back on property costs.

Purchasing a buy-to-let property comes with much research into the wants of any potential occupants, along with the provision of basic necessities required for people to spend an extended stay at your premises.

Comfort is a fundamental aspect that all landlords should place at the top of their priority list when letting out a property - whether their stay is over a few days or weeks, this should always be a priority.

Insurance

No matter where your premises are based, whether it be in the UK or abroad, you must buy specialist ‘Holiday Let Insurance’ if you are letting your property.

This would include cover for public liability and accidental damage, protecting you against any lawsuits if someone becomes injured or breaks something within your premises.

At LTC Mortgages, we can source the right insurance for you whether you’re purchasing a commercial property, buy-to-let property, or residential. 

Are There Any Hidden Costs? 

Some costs that people considering a holiday home must keep in mind are that the payments for utility bills are ongoing, and that the responsibility for the repairs and cleaning rest solely with the landlord/owner of the property.

Some holiday homes can be empty for weeks, months or even a year at a time, which is important to keep in mind when thinking about your budget that these payments will continue when the house may not be in use.

Holiday homes are also subject to specific taxes, some of which may be unique to this type of property. These include: Income tax; Capital Gain tax; Council tax and Stamp Duty Land tax. These place an even larger importance on budgeting before committing.