How will Brexit impact holiday letting?

On 23rd June 2016, the UK voted to leave the European Union after its EU Referendum. The landscape after Britain’s vote to exit the EU is still unclear and changing constantly but we understand the need for answers. Below, Sykes Cottages looks at how Brexit will affect the UK holiday letting industry and how property owners can make the most of these changes.

How will Brexit affect the UK holiday market?

The UK holiday market is already very strong. In June 2016, Visit England published data showing their best ever domestic overnight holiday figures for the first quarter of the year, with spend up by 23% on last year. These figures are hot off the back of a record breaking year for British tourism in 2015 when over £19.5 million was spent on domestic overnight tourism in England alone. This is a sentiment that we have seen reflected in our own website traffic which was up by 20% year on year in June 2016.

Visit Britain has said as a result of Brexit, one impact on the UK holiday market is that more British people may choose to holiday in the UK rather than abroad. Visit Britain already positioned the UK as a must-go tourist destination with its new ‘Home of Amazing Moments’ campaign and last year, Cornwall was in the top 5 most searched for holiday destination by British people, beating Italy, Greece and Tenerife.

It is likely that it will become more expensive to book a holiday abroad due to factors such as the weak value of the pound and, as warned by ABTA, a potential increase in air fares. Although the situation is unclear at the moment, British people heading to Europe also stand to lose other benefits of the EU including the cap on mobile roaming charges, the right to robust compensation on flight delays and medical cover from EHIC cards, all of which may play a role in a decision of whether to holiday at home or abroad.

The Farmhouse in Cornwall The Farmhouse in Cornwall

We could also see an increase in visitors travelling to Britain from abroad. The current value of sterling makes Britain excellent value for a holiday for travellers visiting from Europe or the USA. Visit Britain has forecast overseas visitor spending in 2016 to be 4.2% up on last year and brands like British Airways have already promoted awareness of the situation by hosting sales on flights from USA to London.

Visit Britain’s ‘Home of Amazing Moments’ video, part of a campaign to promote travel to the UK

“As a UK-based company with over 25 years’ experience in this industry, we are confident that the holiday rental market is strong and that it will continue to be so even after Britain leaves the European Union.”
Michael Graham - CFO at Sykes Cottages

How will Brexit affect holiday letting and property owners in the UK?

We’ve discussed how Brexit may benefit the UK holiday letting market, but how can property owners embrace this? Below, we’re looking at the ways in which holiday letting in Britain could be the solution to some of the issues raised by the uncertainty after the referendum.

Thinking of selling a property?

Whilst unclear, some property experts have suggested that there will be a dip in house prices due to the uncertainty caused by Brexit. It’s too early to know if house prices will be affected and how much prices may fall by, although experts collectively agree that this dip is unlikely to last long term.

Sterling and Euro

Whilst it’s not clear if now is the best time to sell a property, holiday letting can provide an income whilst you consider your options. For those who have recently inherited a property, or who have a buy-to-let property that has reached the end of a long-term tenancy and were thinking of selling, holiday letting may be a good alternative.

In the current climate where mortgage interest rates are already at an all-time low and the British tourism industry is set to receive a boost, owning holiday accommodation in the UK could be a very profitable venture. Holiday letting can earn up to three times as much as a traditional-by-to-let and in some cases, the rent earnt from a buy-to-let in a month can be made by a holiday let in one week.

Thinking of buying a holiday home overseas?

Currently, hundreds of thousands of Brits have holiday homes in the EU but post-Brexit, buying a holiday home abroad could become much more complex. There may be more barriers to entry which could include finding it harder to secure a mortgage, needing larger deposits, having to apply for visas and an increase in air fares. All this in addition to the weak pound potentially making it more expensive to buy in Europe, means that buying a holiday home in the UK could be a more attractive option.

The Farmhouse in Northumberland The Farmhouse in Northumberland

For those buying or who already own a second home in Britain, now is a good time to look into holiday letting to supplement your income. Due to a record-breaking number of tourists choosing to holiday in Britain over the past year, holiday accommodation in the UK has never been more in demand.

Farming diversification to supplement income

Farmers in particular may be worried at how Brexit will affect their business. In 2015, 55% of the UK’s total income from farming came from support from the EU’s Common Agricultural Policy (CAP). On top of this, there is uncertainty over how Britain will be able to export goods to the EU in the future and further ambiguity surrounding EU workers.

Tractor on farm

One way farmers can supplement their farm income is by diversifying and adding new business to their normal farming activities. For example, adding a farm shop or offering accommodation. Farms with outbuildings could convert barns or cow sheds into cosy holiday lets or those with some land space could add quirky shepherd’s huts or romantic yurts to their grounds.

Shepherd’s Hut in Shropshire Shepherd’s Hut in Shropshire

The Rowan Yurt in Yorkshire The Rowan Yurt in Yorkshire

"Farm holidays are always in demand, especially for farms where holidaymakers can get involved in the activities. At Sykes, we really enjoy working with farmers to help maximise their income and fulfil their farm’s potential."
Shelley D’Arcy - Head of UK Property Recruitment at Sykes Cottages

Already own a holiday home?

With the increase in British tourism, there has never been a better time to own a holiday home. Aside from this, the vote to leave the European Union has not changed anything at Sykes Cottages and we will continue to support all of our owners in the same way. If you have any questions then please don’t hesitate to give us a call or send us an email today and we’d be more than happy to talk through your queries.

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A short note from Sykes Cottages CEO, Miles Hill

"The simple truth is that no one yet knows what life will be like after Brexit. The landscape is unclear and will continue to be so until the UK's negotiations with the EU are complete, but if there’s one thing we know at Sykes Cottages, it’s holiday letting. We know the UK holiday letting market like the back of our hand.

The recent tourism figures released by Visit England are the best ever and prove that the UK holiday market is strong and open for business. As a company, we will support our owners by continuing to make the most of every opportunity and by doing our bit to ensure that whatever the outcome of the negotiations, the British tourism industry will continue to go from strength to strength."

Let us answer your questions

At Sykes Cottages, we can use our 25 years of experience and knowledge of holiday letting to help with any questions you may have about running, owning, building or buying a holiday let. Call our friendly team of property experts today or complete the enquiry form for more information on holiday letting in the UK.

Disclaimer: This article was up to date on 13th July 2016.

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