Interestingly we have noticed that the demand for holiday homes in the last few months has been far surpassed by buyers looking to relocate to the area from all over the country. This has resulted in many former second homes being bought by ‘relocators’ this year, which is a trend that we feel will continue.
The second home buyers are still very active wanting to secure a holiday home to use themselves and for their family and friends. The type of buyers that we are seeing looking for holiday homes has changed recently with younger purchasers emerging. These buyers are often a young family with children who wish to have more quality time with their family recreating their own fond memories of their time on the Devon coast when they were young. The most demand is for houses with their own gardens quite close to amenities especially pubs and restaurants.
The vast majority of second home owners rent their property to holiday makers for most of the year and these people spend a huge amount of money in the local communities where they stay. With tourism the main income generating sector of the economy it is incredibly important for the population, even though they may resent it at times. The people that are employed by this sector such as cleaners, local holiday management companies, tradesmen, tourist attractions all employ local people.
What Type of property Holiday Home Buyers are looking for
The desire for apartments has waned due to Covid and the bad press of cladding problems with many new build apartments. The most popular choices are coastal houses with their own gardens close to amenities, high on the list would be a 3 bedroom house with large open plan living space. This gives the flexibility of 2 couples with children staying or the ability for grandparents to accompany their children on holiday, and it is important to note that many of the buyers have help with the purchase from their parents. This is also popular with holiday let clients and 3 bedrooms plus is becoming one of the more searched for criteria now, whereas it was historically it was 2 bedrooms.
The majority of these buyers are time poor with busy careers and we are often asked how the management of the properties work as they live so far away. Buyers have to consider when things go wrong when they have guests, which of course they inevitably do, like ovens not working, lost keys, broken cots etc. so having a reliable team that handles all these niggly problems is worth its weight in gold. The properties we have which already have a lettings company and a management company that deals with changeovers and the day to day running of the property are proving very popular.
When we first talk to potential buyers generally their only experience of holiday letting is the amount they paid for their week in a holiday let last year. For a family house in a good area of Devon and Cornwall this could easily be £1,600 to £2,000 per week. So when they sit down and do their first figures they immediately think they are going to make a fortune from their new purchase but don’t take into consideration the letting fees, changeover costs and running costs of a holiday home. As a rule of thumb we tell potential buyers that they should halve the gross income to get an estimate of what their net figure could be. Taking into consideration that holiday letting companies take 20% of the letting amount and that changeover costs are approx. 5% of the letting amount you have already lost 25% of your income before you start.
However on a more positive note you should be able to achieve about 5% net income from a holiday let and you must always remember that you benefit from the use of your holiday home as well, with your own home from home for wonderful holidays and the ability to make many happy memories.
Demand for Self Catering accommodation
It is fair to say the demand for self contained accommodation has exploded over the past year with record bookings and rental figures being achieved across the market.
An article from “This is Money” underlines this phenomenon
“Meanwhile, Hoseasons said bookings for the year ahead were up 215 per cent on where they were this time last year, and 24 per cent up on the same point in 2019 – which was itself a record year.
Bookings in July and August were up 163 per cent compared to last year, and 61 per cent on the same point in 2019.
Later in the year, October trips have soared 111 per cent compared to 2020 and 78 per cent from 2019.
Many were also preparing for further in the future, with bookings for 2022 up 153 per cent.
Whilst Holidaycottages.co.uk said bookings for July and August were up more than 150 per cent compared to the same point in 2020, and almost 120 per cent up compared to 2019.
Matt Brayley, marketing director at holidaycottages.co.uk, said coastal areas in regions such as Cornwall, Devon, Dorset, the Isle of Wight, Wales and Norfolk were seeing the highest demand, with searches currently up more than 150 per cent compared to 2019.
The income you can achieve by letting your holiday home is increasing whilst the number of weeks let is also rising. Buying a holiday home at the moment seems like a great investment in the long term.
If you are looking for advice on buying or selling your holiday home please give the team at Chartsedge a call. With both Caroline and Miles having owned holiday homes that they successfully let we are well placed to give great advice.
Miles Kevin MRICS