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Holiday Homes loophole leaves renting almost impossible in some cities

The HMRC views holiday lets as a trade rather than investments. This means mortgage interest costs can be offset against any income for tax purposes. If you have used a mortgage or loan to pay for a holiday let, you can claim the interest of repayments back against your tax.

Holiday lets count as a business which means the expenses from your rental income can be deducted before you are taxed. This includes the interest you pay on your mortgage. For buy-to-let properties, on the other hand, the law has changed, and this is no longer the case.

It means letting holiday homes has become a relatively cheaper expense and is therefore more profitable if you are occupied for most of the year.

This is leading to quite a few cases where long term tenants are being evicted from their homes, so the landlord can do it up – as one requirement is that it is adequately furnished – and rent to tourists looking for a home, away from home. Plymouth has become a city of holiday lets and in fact so much so, they have an ongoing petition to slow it down.

Cornwall has 62 homes to rent on Rightmove but 10,290 Airbnb listings. In one village in Wales, three quarters of the houses are holiday homes.

Anything that reduces cost will look attractive, particularly in this climate where the three-month temporary solace of mortgage holidays offered a preview to an advantage that could be experienced permanently (for now anyhow), as a landlord, if you just made the switch.

Ruthless Impact

Tenants become vulnerable to eviction, through no fault of their own, when regular landlords aspire to become holiday let landlords.

This becomes even more real during these uncertain times of Covid. As we are being asked to holiday at home the opportunity for these holiday lets arises with the threat of eviction rising too. The eviction ban lifted from protecting tenants in May 2021. Tenants could find themselves on the street with no roof over their head. 

This generation, looking to buy a home in their childhood neighbourhood stand no chance with fewer residential properties to purchase and the ceiling prices unreachable. Renting too will be impossible with higher demand and higher rent. Young people will be unlikely to afford.

Ironically, local business owners who require a workforce to keep their businesses running to cater for tourists, will struggle finding the workforce who have nowhere to live locally.

Should the loophole be closed?

Removing the holiday let mortgage relief would return the incentive to prioritise people looking for a home, not a holiday.

It would open up a more competitive rental market for those wanting to live in these sought-after holiday towns where many grew up/want to return to.

It’s tricky because the nation has become more accustomed to Air BnB or Booking.com, as opposed to the traditional hotel establishments. We increasingly opt for a more ‘authentic’ travel, where you can experience the city, the way the locals do, including living like they live. A home away from home.

Maybe the answer is to incentivise regular landlords who simply rent to those that need a home to level out the playing field.

The Property market gets the green light to reopen today

Lockdown rules eased for homebuyers and sellers

The Government yesterday announced new regulations that will lift the seven week freeze on property viewings and home moves.  Effectively the green light.

People will now be allowed to travel to visit estate agents and view properties. The announcement follows guidance which signalled that surveyors could return to work.  

Although this is positive news for the property industry it appears to be frustrating for others as they argue that it is bizarre you can walk into a stranger’s home to peruse and take your time viewing but you are not allowed to visit close family members to do the same thing.

Does any of this actually make sense?

I believe it does because we are all different and will have different priorities.  We have to start somewhere.  Much of it is actually down to common sense.

Since the sector has been suspended since the end of March new sales have dropped off.  The process of buying and selling a house is now going to be radically different. The guidelines are being finalised but what we know now is that doors should be left open around homes when viewers are in attendance and washing hands and social distancing maintained.  

Mortgages

Getting a mortgage is still a big issue.  Self employed people amongst many others have seen their salaries plummet during the Covid-19 outbreak.  It is estimated that more than 450,000 buyers and renters have been unable to progress their plans to move home since March. Therefore, re opening the doors may not mean very much to those who now cannot afford to sell or buy.

Should the light be amber rather than green?

The fear is not going away. We’re all scared, and we are going to have to live with an element of fear going forwards.  The government have said that we are now past the peak so there is hope but no guarantees.  

We know that once the green light is on you have to drive forwards and cannot stop start to cause an even bigger accident.

This long Bank Holiday as it is now called is going to have to come to an end at some point that we can be sure of because the cost on our economy, our schools, the taxpayer and our sanity is off the scale. 

Bring in the Bookcase Background

Bookshelves in the Background

I used to love watching Through the Keyhole. Lloyd Grossman (and now Keith Lemon) pottering around celebrity homes up and down the country after asking the same question ‘Who would live in a house like this?’ The show gave viewers like me an opportunity to have a nosey around cluttered cottages in the countryside or terribly tidy townhouses in the city. Over the past few weeks, while dipping into the news I’ve found I’m once again peering into houses, homes or make-shift studios. This time of politicians, journalists, reporters and commentators.

Language of Books

Don’t know if I’m the only one to notice this – but it struck me after the first week of lockdown that bookshelves with rows of carefully arranged books seem to have become the go-to-choice as the go-to-backdrop for anyone reporting on COVID19 or anything for that matter! This got me thinking about bookshelves and books and what they say about us as homeowners and what messages they convey about us as individuals. 

More Space Please we’re British

We’re becoming a nation that’s anti-clutter where decluttering has become a popular profession with its own Association of Professional Declutterer & Organisers. Today’s trend in property refurbishment is open plan living spaces which means shelf curating is getting more extreme as living spaces get smaller. Which makes the incorporation of bookshelves a developer’s challenge, a seller’s compromise and a space seeking buyer’s complete no-no.

Share Your Shelf to Share Yourself

Bookshelves contain books that tell stories. They’re a homeowner’s mirror of the family history. Bricks of knowledge hopes and dreams. Books shape us. If you’ve grown up a book-lover, your bookshelf has grown up with you. Which is why they’re trophies of our past. Snapshots of the present and indicators of our personality. The way we organise our books speak volumes about our traits and characteristics. Not to mention whether we display them to our colleagues, clients and contacts during a zoom call

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A Family of Book Worms

The quest to optimise space in property development is always a major driver in all my refurbishments. However – if you step into the house which I call my home, which I moved into in 2002, it tells a different story. It’s the story of a family. 

When my daughters were young, we had mini bookshelves, so the books were easily accessible. Books were part of growing up. Today they’re more ornamental or sentimental. I have a set of Jilly Coopers in the dining room resting on a piece of furniture that doubles up as a cupboard and a bookshelf. I have a whole set of CIM books regimentally arranged on the stairs. And I have four books on the go in the bookcase under my bed. 

Do you think the bookcase is going to have a resurgence as an essential feature as a result of the increase in book reading recently due to the pandemic?

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