Buyers have poured money into holiday lets in the past year as travel restrictions have grounded holidaymakers in Britain. New figures suggest that the staycation boom is here to stay, with bookings well into 2022.
But analysts have warned that investors must buy in the locations that will continue to be popular or face a collapse in demand once foreign travel returns with a vengeance, coupled with a massive oversupply of holiday lets.
Bookings for Summer 2022 are 80% higher than reservations made a year in advance for 2021, according to Guesty, a property management platform.
Three quarters were made by Britons in search of a staycation. Vered Raviv Schwarz, chief operating officer of Guesty, said domestic holidays were here to stay, especially for families with unvaccinated children.
Competition for holiday lets is stiff, with accommodation booked up months in advance. Holidaymakers are willing to pay more for the privilege: the cost of a summer staycation is now 30pc to 40pc higher than in 2019, according to AirDNA, a data company.
Demand may have soared for staycations in the foreseeable future, this may not be a long-term boom.
The return of international travel and an oversupply of holiday homes could have a huge impact on the currently flourishing market warned Andrew Wishart of Capital Economics, a consultancy.
“A big shift of housing stock into the holiday let sector, as investors responded to the spike in domestic demand due to the pandemic, means there is a risk of oversupply in the future,” he said.
“Holiday let rents are unusually high this year and vacancy is very low. But investors would be unwise to expect that to remain the case over the long term.”
“If the boom does cool, some properties will always remain more popular than others. Those close to beaches, country walks, castles and adventure parks will always do well”, said Carol Peett, managing director of West Wales Property Finders, a buying agent. http://www.westwalespropertyfinders.co.uk
The potential returns have caught the eye of investors, particularly as holiday lets enjoy a more attractive tax regime than buy-to-lets.
Joe Stallard of House and Holiday Home Mortgages, a broker, said: “We thought business might slow down after the first stamp duty holiday deadline, but demand is unabated.
“Portfolio landlords would typically have turned to buy-to-let, but we are seeing increasing inquiries from investors who want a holiday let.” …..
https://www.telegraph.co.uk/property/buy/property-investors-gamble-staycation-boom-wont-bust/ The Telegraph – 25th July 2021
If you are looking to purchase a property in Pembrokeshire, Carmarthenshire or Ceredigion, call West Wales Property Finders on 01834 862816. We can find your perfect property for you whilst saving you time, stress, and often money too.