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Property advice: How to cut down your mortgage with a holiday rental | Property | Life & Style


They offer the opportunity to cover costs – even mortgages – or provide an income while still having several breaks yourself.

Sterling’s weak exchange rate has increased demand for holidays in Britain and although income may be seasonal rather than monthly there’s the added advantage of having a property in a holiday area you like yourself – as well as its likely rise in value over the long-term.

That’s one of the reasons why Kate and David Howle are considering adding a third property to their lettings portfolio, which they have built up over eight years.

Having spent £500,000 on two properties and doing them up, they now have assets valued at £925,000. “Holiday letting has been a brilliant money earner for us,” says David, 54.

“We’re able to use the income from both properties to pay the mortgage on our family home and can holiday at Old Smithy Cottage ourselves when we like.”

David and Kate began by converting a derelict barn in the grounds of a former cider house they bought near Ross-on-Wye in Herefordshire in 2010 for £365,000.

Both buildings needed work and David says: “I promised my wife I would have us moved in by Christmas and that was a condition of her agreeing to buy the barn, as we had to live in the cramped cider house for the six months while we did up the barn.

“I did keep to my promise but only to find us in the coldest winter for over a decade and I hadn’t quite completed the heating system. We slept in woolly hats and bed socks for the first few nights!”

David was project manager but as he worked full-time, he could only help in the evenings and at weekends.

“I had three builders who worked with me throughout the project but who I saw before I left for work each day. It was full-on.”

Restoration work cost £125,000 but they were able to claim back VAT and Sutton Barn has been rented out with Sykes Holiday Cottages since 2011, earning them £13,000 a year, £10,000 of which is profit that more than covers their mortgage.

“We get incredible occupancy rates and in 2016 we had 42 weeks rented out in total,” says David.

The Howles now live in the former cider house, so they are able to keep an eye on the holiday let but lacking marketing experience they decided to use Sykes to arrange bookings.

Recently they have taken over the changeover process: “It saves us money and we get to talk to guests ourselves. People will often be out in the garden having a glass of wine and invite us to join them.”

It’s been so successful they decided to buy a second property to rent out – Old Smith Cottage, in Laugharne, Carmarthenshire.

Despite having to pay second-home stamp duty and spending £15,000 on a new kitchen, bathroom and heating system, the £136,000 three-bedroom house is already making them money.

Peter Harrison, chief commercial officer at Sykes Holiday Cottages, says its holiday home owners make up to £40,000 a year on average: “Certain locations and features can also really impact on your property’s money-earning potential. We’ve found that installing a hot tub can increase your income by up to 40 per cent.”

Sykes charges 20 per cent commission, which is the industry standard, and Peter adds: “The market for British breaks is booming. Last year we saw a 22 per cent boost in bookings overall. Because of this and last year’s buy-to-let tax hikes, holiday letting is becoming increasingly attractive to those with a second home, or for people considering their investment options.”

There are tax rules, though, including letting the fully furnished property for at least 210 days a year for no more than 31 days at a time.

But if you have a second home you don’t use much – or want to buy one – it’s worth considering.


Source : EXPRESS

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