A late Easter and two bank holidays in May offer a timely reminder that the holiday season is upon us once again.
What seems to be changing, however, is the choice of holiday destination – especially for short breaks. A story by Landlord Today on the 16th of April cited figures revealing that the number of Britons opting for a staycation has leapt from 56% in 2017 to 66% last year.
The local destinations chosen for a planned or last-minute weekend break or holiday are Cumbria, in the Lake District, Cornwall and Dorset.
Visitors renting holiday homes in the UK clearly value a certain degree of comfort and amenity – with a significant proportion being prepared to pay more for internet access, an open fire, a hot tub, or pet-friendly accommodation.
Good news for holiday home owners
The increasing popularity of staycations is good news for holiday home owners, of course.
Specialists Sykes Holiday Cottages estimates that the owner of a holiday home stands to earn as much as £20,000 a year in rental income from lettings – already up on the £18,000 a year estimate the firm gave in June of 2018.
With opportunities for letting your holiday home through an agency or even listing it on the popular AirBnB website, a steady income might be enjoyed from the rents you receive when you are not using the property yourself.
Not only is this an attractive rental yield, but owners of those homes which qualify as Furnished Holiday Lettings (FHL) also benefit from a number of tax allowances formally granted by HM Customs & Revenue (HMRC).
- relief from Capital Gains Tax – when you come to sell the property;
- capital allowances on your expenditure on furniture, fixtures and equipment for the holiday let; and
- the profits you make from letting your furnished holiday home are counted as earnings for pension purposes.
Holiday home and Airbnb insurance
Though you might be attracted to the prospect of the rental income that might be made from your holiday let property, it is important to remember that lettings are not entirely without risk and that you therefore need specialist holiday home insurance – however you choose to advertise the place to potential guests.
Our guide to UK Holiday Home Insurance explains just what this type of insurance covers, while a further article in our Knowledge Base describes some of the particular risks that an Airbnb property may be exposed to. Risks such as malicious damage caused by your guests, your landlord’s liability as the property owner, the loss, damage or theft of your personal possessions from the let property, and the loss of rental income you stand to suffer if the place is booked but then made uninhabitable through some insured event (such as a fire or flood).
Get the correct type of property insurance
If you made the mistake of relying on standard home insurance to protect a let holiday home or an Airbnb property, you may discover that any claim for loss or damage you subsequently make is rejected out of hand once your insurer discovers that the property is a second or holiday home let to paying guests.