Contents:
- 1: The difference between holiday homes and holiday lets
- 2: Financial advice for buying a holiday home or let
- 3: Sustainable holiday home ownership
- 4: Buying a holiday home or holiday let at Silverlake
The difference between holiday homes and holiday lets
What is a holiday home?
A holiday home is a property used for personal purposes. It is intended to be enjoyed only by the owner and their family or loved ones.
What is a holiday let?
A holiday let is used solely for commercial purposes, run more like a business. You can still use a holiday let as your holiday home, but you must consider how this might affect your bookings and revenue.
What is the difference between purpose-built developments and traditional holiday lets?
Purpose-built developments vs traditional holiday homes: what is the difference and why is it important when investing in a holiday home?
Traditional holiday homes typically start as residential homes and become holiday homes, affecting the local community in which they are based. In contrast, purpose-built holiday homes are built in self-contained developments, intended for multiple holiday visits from tourists or homeowners, with full amenities and activities on-site.
Nestled in the heart of Dorset, Silverlake is actively known as a purpose-built development Estate that puts sustainability, community and comfort at the forefront of everything they do.
Purpose-built developments are more economical and ethical than traditional holiday lets as they do not damage the housing market in the local community. These developments are villages made with the ‘purpose’ of being used only for holidays, which brings revenue to the local economy rather than taking it away. In the case of Silverlake, the land has been vastly rejuvenated to attract and retain hundreds of different species of wildlife.
Financial advice for buying a holiday home or let
Owning a holiday home or holiday let can lead to some impressive financial benefits. However, like every investment decision, some essential elements must be considered. Taking advantage of these rewarding features can lead to more significant savings and financial gains if you consider the following factors before deciding.
Profitable UK holidays
While there are some costs involved in owning a holiday home or let, these are far outweighed by the profits that come with the high demand for UK holidays.
In the UK, holiday homes and lets are becoming increasingly popular and profitable with those looking to invest due to the recent surge in popular ‘staycations.’ This trend has continuously shown a boom in the domestic tourism industry in popular destinations like Dorset. As a result, this surge of interest has led to smart investors making way for golden opportunities by investing in UK holiday homes and lets that can easily generate huge profits with little effort required.
To consider investment, you must look at the current market in the UK, assess property prices across regions and see if there is potential for a strong return on investment.
Holiday home mortgages
Holiday home mortgages differ from residential mortgages and, while the rates can be higher, the tax benefits and profits you stand to make from a holiday home vs a residential property far outweigh the costs.
Another form of mortgage in this field is self-build holiday home mortgages, which apply to new and purpose-built holiday homes, such as the freehold holiday homes for sale at Silverlake Estate.
Furnished holiday lets
If your holiday let is qualified as a furnished holiday let (FHL), this means the property cannot be used for private occupation by the owner and must be prioritised for regular letting. As a legal requirement, the property must be furnished, with access to full amenities, to be eligible for the special tax treatment that comes with this class of holiday lets. This special tax treatment includes benefits such as capital gains, tax relief capital allowances and tax-advantaged pension contributions on the revenue.
However, it is essential to note that some financial attributes may also depend on whether you are buying a holiday with a limited company or as an individual.
Council tax on holiday homes & business rates on holiday lets
Whether you pay council tax on your holiday home or lower business rates depends on several factors, such as the intended use of your property, varying from commercial-use properties to self-catering holiday lets, for example.
As of 2023, the UK re-evaluated business rates, meaning it’s vital to understand whether you intend to use your holiday home for yourselves or as a holiday let.
Sustainable Holiday Home Ownership
Sustainability is a significant factor in holiday home ownership.
Sustainability adds value to your property, future-proofs your holiday home and saves money in the long term. Successful holiday homes should include sustainable materials and energy saving devices. Find out more via the link above.
Buying a holiday home or holiday let at Silverlake
Both holiday home and holiday let ownership are possible at Silverlake, with many people looking for a combination of the two. With a dedicated property team to help with every step of the process into holiday home ownership, you can rest assured your investment journey will show immediate benefits.
Here at Silverlake, Dorset we have a selection of luxury lakeside holiday homes with premium on-site facilities close to Dorset’s best tourist attractions and stunning Jurassic Coast. With Dorset holidays in high demand, the investment potential is boundless, with impressive savings and profits easily attainable at our Estate.
Ready to acquire a holiday property? Contact our property team today and we will assist you with buying a holiday let or home in the UK.