There are a lot of good reasons to invest in a holiday let. The house can be used to generate a stable second income, and you can also use it when you go on holiday to make the holiday cheaper. However, buying a holiday let can be complicated, especially if you have a tight budget or an existing mortgage.
Here are three points that you should consider if you are thinking about buying a holiday let in the UK.
Why Choose The UK?
There are a few good reasons to buy a holiday let in the UK. Britain is a popular holiday destination for foreigners, but it is also very popular with Brits. A recent study found that over £23 billion was spent on UK staycations in 2017, so if you buy a holiday let in a popular area, then you should have no problem renting it out to holidaymakers.
It can also be financially beneficial to buy a holiday let in the UK. Various tax laws make it easier for Brits to buy a holiday let in the UK (rather than abroad). For instance, most people pay less council tax on their holiday let.
How to Raise Capital
One of the best ways to acquire capital for your holiday let is with a mortgage. If you already have the money saved up, then this won’t be a problem for you, but most people need a little financial help when they are investing in a holiday let.
Thankfully it is possible to get a mortgage for a holiday let in the UK, even if you have an mortgage on your current home. It is also possible to transfer some of the paid off money from your existing mortgage to help pay for a holiday let. Find out more about getting a holiday let mortgage by visiting the experts at www.holidaycottagemortgages.co.uk.
It is also possible to raise capital by releasing some money from your pension. Current rules state that British people over 55 can release up to 25% of their pension tax-free, which could cover some of the cost of the holiday let.
Mortgage Options for A Holiday Let
If you are getting a mortgage for a holiday let that will be rented out (to tourists and holidaymakers), you will need to get a specific type of mortgage. These types of mortgages are offered by most lenders, but there are holiday lenders who can help you. These mortgages are like standard mortgages, one of the key differences are that there are often restrictions on the maximum value that can be loaned.
There are also often tax benefits with holiday rental mortgages. For instance, the rental income can be offset by the interest on the mortgage. So, if you make £13,000 one year renting out the property and the annual mortgage is £4,000, you will only need to pay tax for the final £3,000. This is a great way to save money on taxes each year!