Should you invest in a holiday let in West Sussex?

With summer finally in sight, it’s a good time of year to start considering whether you could – or should – invest in a holiday let in Chichester, Bognor Regis, Gosport or the wider Southern region.

Are holiday homes a good investment?

In short – yes! Whether you’re looking to generate a whole new income, add to the pension pot or just cover the costs of running a second home, a holiday let can be a great investment. Figures show that buyers who own a holiday let can earn up to 30% more yield than buy-to-let landlords.

In addition, as holiday lets are classed as businesses, you may be eligible for a number of tax benefits. You can also gain other tax relief if your property meets the furnished holiday let criteria. This can be a complicated area, so it’s crucial you research everything as thoroughly as possible to find out what tax benefits you could potentially receive.

As well as the financial gains, owning your own holiday home gives you the opportunity to take a break either on your own, or with friends and family, whenever you like; you just need to make sure that the property is available to let for at least 210 days a year.

As with any kind of investment, you should research all of the factors involved, including how a holiday let mortgage works, as this has different stipulations when compared to a standard buy-to-let mortgage. Other important considerations include rental rates for your area, understanding any additional costs, such as the higher rates of stamp duty or council tax for a second home, and how furnishing your property may affect your investment.

What are the challenges of owning a holiday property?

While you might see a great return on investment during the high season, without the security of a long-term tenancy agreement, the property could find itself empty, especially in the low season. It’s important to make sure that you’ve budgeted for any potentially quiet times throughout the year.

The very nature of holiday lets means that new guests will be visiting the property every few days, so you’ll need to make sure it’s properly managed – crucial when you need to secure positive reviews from your visitors. This involves cleaning the property every time a guest leaves and checking in regularly to see if anything needs fixing or replacing. You’ll need to decide whether to do this yourself or pay a reputable management company to do it on your behalf.

Feeling the love from the locals

One of the biggest challenges facing those who own a holiday let are the potential concerns from local residents. The increase in the number of holiday homes has pushed up property prices in some areas and local communities are concerned that they will be forced to move away if this trend continues. To address the concerns of both local residents and holiday homeowners, the government has introduced a registration scheme for short-term let properties in England.

Is the UK staycation market still popular?

Platforms such as Airbnb, Booking.com, Cottages.com and Vrbo have seen exponential growth over the past few years, with UK ‘staycations’ becoming ever more popular because of the Covid-19 pandemic. So, is there still an appetite for staycations now we’re returned to jetting off overseas?

A recent survey of 1,000 people found over a third were planning to take a short break in the UK over the next 12 months – unchanged from 2022. Additional data from Verdant Leisure revealed that 84% of the 1,000 customers it surveyed said they were likely to go on a staycation in 2023.

Are West Sussex or Hampshire the right places to invest in a holiday let?

Recent research by campaign group Inside Airbnb reveals the number of "entire places" for rent in seaside towns increased by 56% between 2019 and 2022 in England and Wales, compared to a 15% rise in non-coastal communities.

It’s absolutely no surprise that people want to holiday by the sea, so if you’re thinking of investing in a holiday home, we have some prime locations right here on the South Coast, including the stunning areas of Selsey, the Witterings, Bognor Regis, Stokes Bay, Browndown Point and Lee-on-Solent. With the thriving market town of Havant and the beautiful fishing village of Emsworth also on our doorstep, there’s an exceptional choice of places for holidaymakers to visit.

In addition to homes that can be found right by the beach, Chichester was ranked fifth in the country as an ideal place for Airbnb hosts last summer, with a predicted potential revenue of £2,000 a month and a quarterly rental growth of 28%. The data, recorded by the Bureau of Transportation Statistics, claims: “This West Sussex city is definitely one to watch for Airbnb hosts considering expanding into new areas.”

If you’re considering investing in a holiday let in one of the most beautiful areas in the country, then give the White & Brooks team a call today. We can discuss your requirements, give you expert knowledge on all the areas that are popular with holidaymakers and suggest properties for sale that may make fantastic holiday lets.