Welcome to your May Owner Q&A! Rachel, Sales and Operations Manager for Property Recruitment here at Sykes Holiday Cottages...
Owning a holiday let is a brilliant and profitable way of earning extra income. With demand for staycations on the rise, UK holiday homes continue to be the ideal investment.
To ensure you’re getting the most from your holiday rental, we’ve put together a list of some of the best tips for maximising the savings on your property, including advice on where to find the best deals along the way.
1. Holiday home tax advantages – how the Taxman can help
2. Switch and save – get the best deal from your energy suppliers
3. Water bills – stop sending money down the drain
4. Energy-saving bulbs – light the way to smaller bills
5. Home insulation – don’t let cash escape
6. Automatic heating – bask in the warm glow of money saved
7. Protect your property – ensure you’re insured
8. Furnishing your holiday home – sit back and enjoy the savings
9. Buying appliances – top tech for top savings
10. Gain through guest essentials and thoughtful extras – the little things go a long way
Owning a holiday let means you could be eligible for several significant tax breaks, but a lot of owners don’t always realise the full potential of this opportunity.
When it comes to rental income, properties that qualify as Furnished Holiday Lets (FHLs) have special rules that work in your favour as an owner.
In order to qualify as a FHL, your property needs to comply with specific criteria, including things like being available at least 210 days per year and having bookings for more than 105 of those days. You can find out more about qualifying specifications with our Tax Guide to Furnished Holiday Lets or on the HMRC website.
If you do qualify, you may be able to claim Capital Gains Tax reliefs, since, rather than being classed as an investment, the property qualifies as a business asset. You may also be entitled to capital allowances for things like furniture, fixtures, and equipment.
Unlike with other residential property incomes, the profits made from a FHL count as earnings for pension contribution purposes. What’s more, if the property is closed during part of the year because of a lack of custom, the whole year’s expenses, such as insurance and loan interest, can potentially be deducted, so long as you’re not living in the property.
Get tax savvy and you’ll be instantly saving, practically without lifting a finger.
Being smart with your energy bills could save you hundreds of pounds each year.
A recent report from the Competition & Markets Authority (CMA) found that roughly 70% of customers of the UK’s “Big Six” suppliers – EDF, British Gas, Npower, Eon, SSE and Scottish Power – currently pay the Standard Variable Tariff, despite the fact that it is far costlier than other alternatives.
When it comes to energy tariffs, most people start out on a fixed rate deal, which will provide them with the cheapest and best option. But, rather than allowing yourself to be shifted onto a standard variable rate by your existing supplier once this has come to an end, carry on profiting from the cheapest deal by making sure you find out the end date of the fixed rate deal and switch to another new one instead.
There’s no need to worry about informing you current supplier, as your new one will deal with all of the fiddly details for you. Just make sure to check if there are any cancellation fees involved, before you go ahead.
Thinking about switching? Comparing is quick and easy. Uswitch, the Ofgem-approved comparison website, helps you work out which supplier has the best local deal for you and they’re exclusively offering our readers a free case of wine worth £60, if they for switching to any dual fuel energy deal before 25/08/17. You get the best deal and get to treat yourself too. The savings go on and on.
Although you’re not able to switch your water supplier, there are still lots of great ways to reduce how much your water holiday home uses in order to help bring down the cost of your bills.
If you have a power or mixer shower, water-efficient showerheads are an ideal method of saving water and energy alike. The flow of water they produce seems much higher than it actually is, so you conserve water without any perceptible difference whatsoever. Electric shower units can be damaged by water-efficient showerheads, though, so do be aware before you install one.
Older UK toilet models that are still in use can guzzle a staggering 14 litres of water with every flush. Nowadays, newly installed toilets are not permitted to have a flush volume higher than 6 litres – however, this amount can be reduced still further in order to save you money.
A dual flush toilet offers two different volumes of flush: a low volume one for liquids and a full volume one for solids. These models make a noticeable affect on water conversion, using only around 2-4 litres per flush. In addition to this, they tend to have larger trapways, so they’re far less likely to get clogged.
If you’d rather not go so far as replacing your toilet, you can install a cistern displacement device, which many water companies provide free of charge. Having one fitted to your toilet could save you 1-3 litres of water for every flush.
Water companies offer all kinds of free gadgets and devices to customers. Visit Save Water, Save Money, to find out what free, water-saving gizmos are available in your local area.
You can also find lots of clever water-saving tech, including the gadgets mentioned above, at a saver-friendly price on Amazon.
Does your holiday let have a garden? It’s time to ditch the hose in favour of a water butt. These uncomplicated contraptions collect and store rainwater straight from Mother Nature herself. Simply fill your watering can and sprinkle away, to watch your savings grow.
Cosy evenings in at a holiday home require plenty of lighting. It’s easy for your energy bills to creep up, if you aren’t careful.
A simple way to combat this is through energy-efficient lightbulbs. You can choose between either Compact Fluorescent Lamps (CFLs) and Light Emitting Diodes (LEDs). CFLs use up to 35% less energy than everyday incandescent bulbs, though they aren’t nearly as efficient as LEDs, which, in comparison, use around 75% less energy and also last far longer.
You’ll be able to find LED bulbs for most light fittings and, according to the Energy Saving Trust, replacing just one traditional light bulb with a LED alternative could save you up to £6 a year. Multiply that by the number of light fixtures there actually are in your holiday let and the savings quickly add up.
When buying energy-efficient bulbs, you’ll notice that they are grouped by lumens rather than watts. This is because, rather than the traditional focus on how much energy (in watts) is consumed, energy-efficient bulbs allow us to focus on what light (in lumens) is produced.
The table above will help give you a rough idea of what light strength you should choose, if you’re looking to replace your existing incandescent bulbs.
According to recent findings from the Energy Saving Trust, 25% of the heat in an uninsulated property could be lost through its roof, whilst a horrifying 66% heat loss could occur through the walls.
On a detached house in England, Scotland and Wales, the Energy Saving Trust estimates that insulating your roof/loft typically costs around £395. With insulation normally expected to last for a minimum of four decades, and bearing in mind that this could save you on average £225 a year, it’s obvious to see that it pays for itself in just a handful of years.
If your house dates from after 1920s, the likelihood is it’ll have cavity walls. Most homes from around the 1990s will have it already, but, if yours doesn’t, it’s a very sensible investment to make.
On a detached house in England, Scotland and Wales, the price to install is around £720 pounds, but with the annual saving potential once again being £225, you’ll see the cost returned in a very short time.
If your house dates from before the 1920s, it will likely have solid exterior walls. Solid wall insulation tends to cost substantially more than cavity walls, but this ultimately means that the savings will be greater too.
Solid walls can be insulated either externally or internally. External wall insulation costs from £8,000 up to £22,000; internally wall insulation costs from £4,000 up to £13,000. It’s key to remember that there’s an annual savings potential of £400, because of this. Solid wall insulation is definitely worth investing in, it’s just that it takes more time to pay for itself.
Costing roughly £200 to have professionally done, draught-proofing windows and doors and shoring up cracks in skirting and flooring could save you £25 per year. Alternatively, a DIY solution could cost you even less – especially with low-price draught-exclusion materials.
In colder months, heating your holiday property will naturally be a cause for concern when it comes to saving money. No need to panic though! Instead of running the risk of soaring bills because guests are chilly and cranking up the heat, consider installing a Programmable Thermostat.
This will allow you to schedule when the heating comes on at peak times of day. Your house will remain consistently warm, you needn’t panic that guests have left the heating on all day, and your bills won’t be hitting the roof either.
Many programmers also allow you to set ‘on’ and ‘off’ periods, which is perfect if your property is only be occupied at certain times of year.
Want to make an even simpler save? According to the Money Advice Service, turning down your thermostat by just 1°C could save you up to 10% off your heating bill!
Holiday homes are not covered by standard home insurance, because there are too many risky factors surrounding them. Being unoccupied for potentially long amounts of time leave them open to burglary, structural damage, and more.
To protect yourself and your property, it’s unequivocally necessary you’re properly insured. This is where holiday home insurance comes in, which includes both buildings and contents cover.
Different insurers offer different holiday/second home policies, so it’s paramount that you double check the terms for each one very carefully, in case there are any exclusions, then compare with others on the market.
Before you even think about purchasing furniture for a holiday property, you need to understand that everyone’s taste is not the same.
It’s vitally important you don’t over-apply your own style too heavily when it comes to decorating a holiday let. Yes, you may love plastering the colour red on every visible surface in your home and have a penchant for porcelain spaniel ornaments, but, odds are, your guests won’t share your taste.
To make sure you’re attracting the most guests and the most income, create an ambience everyone can enjoy.
Aim for a more neutral style and you can’t go far wrong. Keep things simple: try to balance fresh and functional with a sense of simplistic elegance. Use the same approach when painting and decorating too. Neutral colours have the broadest appeal, so always stick to light and clean colours for your walls.
It’s always a good idea to reflect the architectural style of your property in its furnishings, for a natural sense of sympathetic harmony. If you have a historic property, for instance, don’t fill it with a hotchpotch of contemporary furniture. Instead, opt for understated and tasteful period pieces displayed in a fresh, modern way, so you provide a homely atmosphere that doesn’t feel too cluttered.
The quality of each piece of furniture in your holiday let is hugely important. Yes, you want to save money, but, when guests are looking for a holiday home, they’re after something with more of a premium edge than the usual every day. So, filling your home with cheap quality fixtures that wouldn’t look out of place in an office block isn’t likely to do you any favours when it comes to bookings.
At all times, balance frugality with quality and you’ll be sure to save money whilst also inviting long-term income.
Buying good furniture definitely doesn’t have to cost the earth. There are all sorts of brilliant places you can nab yourself some top-quality furnishings for next to nothing.
For something a little different, why not track down the nearest furniture auction or find out when the next local police auction takes place? All sorts of incredible furniture, including beautiful antiques, passes through these events each day and you never know what gems you’ll find for a fraction of the usual price.
If the thought of bidding amid a crowd of eager money savers sounds a bit much, online auction sites like Ebay are the answer. Not only is bidding stress-free – you can also tailor your searches to what you’re looking for, so you’re sure to find exactly what you’re after, for an extraordinarily cheap price. Gumtree’s online classified ads are wonderful too, since they’re great for focusing on what’s available in your local area.
Those that love finding something for nothing will love Freecyle and Freegle. They allow people to list all sorts of things they no longer want, which they’re giving away for free, usually just in exchange for you being able to collect items in person. I hear savings to be had!
When buying furniture basics, thinking practically is key. Shopping for the sitting room or dining area? Consider how many people your property accommodates and make sure there’s enough seating space for each person.
Bear in mind who’ll be staying with you too. Family- and dog-friendly properties may mean there’ll likely be a little mess, so washable and/or easy-clean covers for sofas and armchairs are a sensible choice. In fact, washable paints for walls and solid floors are a good plan too. It all saves you time, stress, and money in the long run.
For bedrooms, zip and link beds are hugely helpful, as you can change the configuration of a room in moments by transforming a double into a twin, allowing you to cater to more guest needs and widening your appeal. King size beds are often much sought-after by guests too and make a great selling point, so investing in these may be a wise option, if your budget allows.
The old adage “buy cheap, buy twice” couldn’t be truer, when purchasing holiday let appliances. Flimsy, unreliable products will repeatedly cost you time and money to deal with. Making sure you buy high-quality appliances for your holiday home means they’ll last longer, work well, and keep both your wallet and your guests happy.
Making sure you buy appliances for your holiday home means they’ll last longer, work well, and keep both your wallet and your guests happy. Look for robust, good quality models that are easy for your guests to use.
Buying new is recommended, since you’ll receive a 12-month warranty in case anything should break. It may well be worth considering purchasing an extended warranty. If an appliance does break, it’s usually easier and more cost-effective to have it replaced rather than paying for repairs. This saves you paying for call-out and repair costs, and also prevents you from disrupting your guests or affecting your occupancy.
John Lewis offers competitive extended warranties on certain products, as well as having deals on high-quality appliances. You’ll also find some excellent Amazon deals on appliances, along with customer ratings and reviews.
A Washer and dryer is a very sought-after feature in holiday properties. Guests often like to pack lightly – not to mention explore the great outdoors in all its mucky glory – so chances are they’ll want to clean their clothes at some point, if they’re staying for more than a couple of days.
However, according to Uswitch, a standard washing machine can account for roughly 7% of your energy bill, which is why it makes sense invest in an energy efficient model. Although they’re more expensive, they use less than half the water, energy and even detergent that typical washer dryers do, so the overall investment balances out much quicker than you’d think.
The kettle is probably one on of the most used appliances in any household – even more so in a busy holiday let. To stop your energy bills rising with floating away amongst the steam, why not switch your current model with an eco-kettle? They use 20 percent less energy than conventional kettles and only boil the amount of water that’s actually needed.
If you live on site or near to your let, there are lots of clever tech touches available that will help you save money and time during guest changeovers. All sorts of remote control devices exist that allow you to turn every appliance in your holiday home on or off simultaneously. You’ll save time when arriving and you’ll have the added peace of mind that nothing’s left on standby once you’ve left.
A lot of remote devices also allow you to put certain appliances on a timer. Are your guests arriving after dark on an autumn evening or winter afternoon? You can make sure everywhere that’s necessary is lit up and ready for their arrival time without worrying about soaring electricity bills. Great service and great savings – everyone’s happy!
Making sure to stock a few basics, as well as offering some thoughtful gestures here and there, can make a world of difference for guests and property owners.
Although this doesn’t exactly generate savings per se, you’ll ultimately be generating long-term income: simple gestures make a world of difference, because they add sincere value to what your property offers, and positive customer experience make them very much inclined to rebook.
What’s more, happy guests talk and glittering reviews open up the door to more bookings, so it’s even more so in your interest to go the extra mile.
We’ve drawn on the wisdom of seasoned holiday let owners from advice forum Lay My Hat to give you the low down on what to provide at your let.
Leaving a welcome pack for your guests is a must. To help orientate visitors, it’s essential to include concise, useful and clearly written information on how things work in the house, printed out neatly and kept safe in a plastic folder. Where will they find wood for the fire? How does that tricky back door latch work? Where do the bins need to be put out? Giving them all the information guests might need will make them feel assured and probably save you from receiving a few quizzical phone calls too.
Now it’s time to consider more thoughtful touches… Imagine how grateful your guests would be to find the sort of everyday provisions everyone always forget to bring along, when they arrive? A pint of milk in the fridge and a loaf of bread on the kitchen counter are all it takes to make someone smile. A bunch of fresh flowers, a packet of biscuits, eggs, sweets, a few doggy treats –any of these meaningful touches will make a wonderful impression.
Guests expect a holiday home to be as well-equipped as their own homes. Aim to include:
We hope our advice helps keep your coffers full and allows you to bring your guests an unforgettable holiday experience.
With over 25 years’ experience, our local expertise will provide you with peace of mind and booking success you deserve.
Visit our Let Your Cottage page, to find out how we can help support you on your owner journey.
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