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A UK staycation boom is predicted once lockdown lifts

by Nikki Dale -

A UK staycation boom is predicted once lockdown lifts.  We saw a boom between the lockdowns in 2020 and this trend will be one to capitalise on in 2021.

Low capacity means higher prices on holidaying abroad, which is what all the travel companies need to dig themselves out of a huge financial hole. Tui, says prices are one-seventh higher than in 2019 – the last “normal” year.  This along with timing of, how quickly the vaccine will roll-out, when will the travel restrictions lift and when will facemasks not be needed, all leans towards a staycation boom year for the UK.

Staycation: Short-term Lets and Furnished Holiday Let investments

Short-term Lets *(STL)

STL’s are standard buy to let properties generally located in key city location or can be a holiday destination town.  Many leases do not allow Short-term lets, so not all properties can do it.  They are not linked to a hotel operator or a holiday resort.  It’s not serviced accommodation, it’s a home from home – it’s simply a different way for investors to maximise on their buy to let income.

Short-term let markets incl.: city breaks, city events, employee stays (relocation of companies) and since the pandemic, key workers and self-isolators.

In the right location investors should see double net rental return than on a long-term let (AST) of the same or similar property.

Furnished Holiday Lets (FHL)

We saw the staycation boom between the lockdowns in 2020 when restrictions relaxed in the UK.  A furnished holiday let or FHL is a furnished property that is let for numerous short periods and is geared more towards holiday locations.

It is popular with investors as is very tax advantageous. The average capital allowances fixtures claim on a furnished holiday let can make the rental profits tax free for the first four to eight years.

The Government recognises the FHL market and has supported it with a number of measures during the pandemic.

IMAGE: Eden Grove, Appleby, Lake District


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