"As the travel and hospitality industry start opening their doors, so too are lenders."
At the moment, it appears that staycations are tipping the balance. After another Government announcement around the reopening of the hospitality sector in England from 4 July, holiday bookings across the UK are reported to have risen significantly with coastal counties and holiday destinations, such as Devon and Cornwall, seeing notable surges. Although when you see the recent photos taken at some coastal resorts, the back garden, a tent, a BBQ and ready access to fridge with an array of cold beverages also remains attractive! Hoseasons and Cottages.com, two of the largest self-catered holiday accommodation providers in the UK, were said to have recently seen their best online sales days, with the former seeing a booking every 11 seconds, and the latter seeing a 455% surge. Sykes Holiday Cottages saw similar growth, with a 417% booking growth over the past month, and a 221% growth compared to the previous June. These figures demonstrate the demand for a post-lockdown break and how many people either can’t afford an overseas holiday or are choosing to holiday in the UK.
Travel and hospitality are obviously two huge sectors which have been largely decimated by the recent crisis. In comparison, although the buy-to-let market has also suffered during this period – as a result of some major lending obstacles – it has been able to continue operating, albeit in a somewhat limited capacity. Inevitably, one of the areas to suffer the most was the holiday let market, with many lenders pulling their offerings to reflect the lack of activity and potential liabilities. However, as the travel and hospitality industry start opening their doors, so too are lenders.
Monmouthshire Building Society has just re-entered the holiday let market, adding a range of products for individuals and limited companies. The holiday let and limited company holiday let products are available to individuals, joint applicants and limited companies. The range allows the mortgage holder to let the property through a variety of avenues, including Airbnb.
Roma Finance has also launched a holiday let and serviced accommodation five-year term base rate tracker mortgage product. As income on holiday lets can be seasonal, Roma will allow the borrower to ‘top slice’ actual rent from other provable income, and each case will be underwritten individually.
Both of these announcements represent positive news. Holiday and short-term lets were hot topics for landlords in 2019 and this was an area – like many others – where landlord demand was expected to increase over the course of 2020. That was until it hit the Covid-19 wall.
The introduction of such options reflects shifting market conditions. And I fully expect increased choice to emerge in the coming weeks as demand for staycations remains strong, buy-to-let lenders look to generate additional business as funding lines reopen and more landlords will take advantage of the available opportunities. Meaning this will be an interesting area to follow over the rest of the summer, and beyond.
