Articles:
Holiday Let: Location is still key
SB May 2007
Your ability to obtain a
holiday let mortgage is largely judged
on potential rental income. So you need to make
sure this income is as high as possible. How do
you do this?
First and foremost, by making sure you locate in
the right area.
Of course, if you intend to retire to it
yourself one day, you want to choose an area you
would be happy to retire to. But you still need
to keep the holiday rental in mind, if you want
to be sure of obtaining your holiday let
mortgage. You may have always fancied retiring
to Mudford-in-the-Marsh. But however much of a
soft spot you may have for Mudford-in-the-Marsh,
do people actually go there on holiday? If not,
a rental property there is unlikely to attract
the holiday crowds, however seductive you make
your advertising.
So it does need to be in a place where people
actually WANT to go on holiday. Looking on the
Internet can help you determine where the
highest demand is.
Ever-popular traditional holiday areas
include the south-west (Cornwall,
Devon,
Dorset), the
Lake District,
North Norfolk,
the
Yorkshire Dales. You’re pretty safe
with these, but remember house prices in
these areas have also spiralled, so your
holiday let mortgage will be a lot bigger.
The
Scottish Highlands are also an excellent
area of demand, and purchase prices are not
so high here. Not all holiday let mortgage
companies will lend on properties north of
the Border, so ask your broker to find one
that will.
Don’t assume your holiday let has to be by
the sea or in the countryside. Tourist
hotspot cities such as York, Bath and
Edinburgh are always popular and are a much
better bet for getting year-round bookings.
Nowadays more and more people are looking
for a holiday let that doesn’t involve much
travelling to get to. So areas close to
the big conurbations are on the up.
Brighton is a prime example of places
serving the
London market. House prices
there have already spiralled almost out of
reach, but there is a revival in other
seaside places on the south coast. And keep
an eye on coastal regions near other big
conurbations like Glasgow and Manchester.
To decide on your location you also need to
consider your prime market. If it is families,
you are more likely to be looking at the
seaside, perhaps in a lively area. If it’s
primarily the retired market, you may prefer a
more secluded spot in a quiet area. You are
unlikely to find one that will please everybody,
so decide what you’re aiming at.
Finally, remember it’s a BUSINESS. To get your
holiday let mortgage you have to demonstrate
your income potential. So always keep in mind
that it’s not primarily about what YOU want, but
what people are willing to pay for.
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