Research by real estate adviser Altus Group into Government statistics on UK Furnished Holiday Let (FHL) property and published on the BBC website has found that there are over 11,000 more FHLs in the UK that have changed use from 2nd homes to FHLs than there were before the pandemic.
Pre pandemic, there were a total of 56,102 FHLs and now there are 67,740. Of the 11,000 increase, 4,000 of those were in Devon and Cornwall alone. This is clearly adding to the housing shortage and the government is bound to take action.
FHLs can be extremely attractive sources of income and leisure too. The attractions of an FHL:
FHLs are clearly an attractive investment given weekly rentals could be £1,000+ per week compared to a short term assured leasehold (normal residential buy to let) at a fraction of this sort of income.
The Government is Watching:
The Ministry of Housing, Communities and Local Government (MHCLG) issued a consultation paper and part of this suggested that FHLs should only qualify for business rates and therefore, small business rate relief for the time that it is commercially let and pay council tax during the other periods.
We also suggest given that landlords are already being ‘attacked’ by higher stamp duty charges and lower income tax relief on finance payments, capital gains tax increases are certainly a possibility.
We know that the government has already consulted on capital gains tax changes for 2nd properties and buy to lets. Expect increases to these as well as FHLs in the Autumn 21 Budget.