{"id":6037980,"date":"2021-12-08T09:16:40","date_gmt":"2021-12-08T09:16:40","guid":{"rendered":"https:\/\/www.buyassociation.co.uk\/?p=6037980"},"modified":"2021-12-08T09:16:40","modified_gmt":"2021-12-08T09:16:40","slug":"buy-to-let-alternatives-becoming-more-appealing-to-landlords","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-us\/news\/buy-to-let-alternatives-becoming-more-appealing-to-landlords\/","title":{"rendered":"Buy-to-let alternatives becoming more appealing to landlords"},"content":{"rendered":"
Over the past couple of years, buy-to-let landlords have been diversifying more than ever, leading to lenders having to tailor the products they offer accordingly.\u00a0<\/strong><\/p>\n There has never been as much choice in the buy-to-let specialist lending space as there is now, says Barry Searle of Castle Trust Bank<\/a>. It has been 25 years since the first buy-to-let mortgage<\/a> product was devised, but Searle believes the biggest changes in the sector have taken place over the past few years.<\/p>\n He says that, despite the challenges faced recently, “a lot was achieved” in 2021, and we can therefore look forward to the year ahead “with optimism”. For buy-to-let landlords<\/a>, as the space continues to change due to shifting tenant needs, changing location demands and legislation affecting the outlook, there are still huge opportunities in the private rented sector.<\/p>\n One major shift in the buy-to-let space has been towards holiday lets<\/a> and short-term lets, which is something else lenders have had to adapt for. The rise in the “staycation<\/a>” solidified during 2020 and 2021 when people were unable – or less tempted to – take holidays abroad.<\/p>\n Many property investors and landlords decided to diversify during this time, to plug the gap and meet the surge in demand for short-term lets. According to Primis Mortgage Network, holiday let mortgages were the most common broker query during September this year, says Searle.<\/p>\n “Travel is likely to open up in the future, but the popularity of holiday lets looks set to stay. In fact \u2013 perhaps reflecting awareness raised in the recent COP26<\/a> summit \u2013 Sykes Holiday Cottages says that one in five people are more likely to consider a staycation because of concerns for the environment.”<\/span><\/p>\n While traditional buy-to-let<\/a> is still a hugely appealing option for many, growing numbers of landlords are looking into alternatives, including short-term lets and HMOs<\/a> (houses in multiple occupation). Landlords and investors can often achieve better yields with holiday lets than with standard buy-to-let, but there are other factors to consider.<\/p>\n Searle comments: “According to research by BVA BDRC, are HMOs and multi-unit blocks and both of these have also performed strongly over the past 12 months with demand from both tenants and new investors entering the market. <\/span><\/p>\n “As with property refurbishment, many of these investors have benefitted from product innovations, such as Bridge to Let, that have enabled them to maximise opportunities with the safety net of a guaranteed exit from their initial short-term finance.”<\/span><\/p><\/blockquote>\n As a buy-to-let alternative, holiday lets and short-term lets can be a great option for maximising returns. According to Advantage Investments, landlords can expect ongoing success from these investments.<\/p>\n \u201cDomestic holiday experts are predicting that this demand for UK staycations is here to stay, at least for the next 4-5 years, which opens up lucrative investment opportunities in holiday property rentals,\u201d says Advantage Investments.<\/p>\n While many investors and landlords might prefer to stick to the tried-and-tested traditional\u00a0buy-to-let<\/a>, it seems they would be wise not to overlook the opportunities available in short-term lets.<\/p>\n Particularly as people become more environmentally aware, even as the aftershock from the pandemic subsides and opens up international travel, growing numbers of people will still opt to stay local. Another important avenue to consider is short-term lets for business use, away from typical holiday destinations. With more people than ever working from home, and opting to move further from their office, there is likely to be an increase in people travelling to a workplace for a few days and seeking short-term accommodation nearby.<\/p>\nBuy-to-let turned holiday let<\/h4>\n
The benefits of diversifying<\/h4>\n
Will holiday lets remain attractive?<\/h4>\n