Fancy A Holiday Home By The Sea?

Property journalist Sharon Dale reveals where to look for best value and what to buy

Summer always brings a spike in people browsing property portals for a holiday home by the sea.

But checking out prices in Britain’s coastal hotspots can lead to disappointment when would-be buyers realise they can’t afford to make their dream a reality. Homes in these areas command a premium, especially if they come with a sea view.

A two-bedroom cottage in pretty Southwold in Suffolk will set you back over £400,000, while in beautiful Wells-Next-The-Sea in Norfolk, a cottage within walking distance of the beach fetches from £350,000.



Of course, these places are popular for good reason. Along with natural beauty, they also have good amenities but if you travel a little further down the coast you could find that prices are much less expensive.

Whitstable, a favourite with Londoners thanks to great rail links to and from the capital, is a good example. A one-bedroom flat costs from £150,000 and yet five miles down the coast in Herne Bay, they start at £110,000. Savvy buyers have already spotted this opportunity and prices in Herne Bay are rising as a result and its old bungalows are being demolished to make way for “Grand Designs”.

In Yorkshire, Whitby and Runswick Bay are ultra-desirable places to be by the sea. Property prices reflect this. Most one-bedroom apartments in Whitby start at £100,000 but 20 miles further along the coast in Saltburn-by-the-Sea, one-bedroom flats that are suited to holiday lets start at £65,000 and there are signs of gentrification in the town.

The key when checking out cheaper alternatives to well-known hotspots is to assess whether they are up-and-coming. The well-known signs of gentrification include an increase in housebuilder activity, better quality shops and cafes opening, property prices rising faster than expected and the number of renovation projects underway.

If you do decide to buy a seaside holiday home for your own use or to let, then do your homework and pay attention to the costs involved and the type of property you buy. You will pay an extra three per cent in stamp duty on anything that is not your main home.

The good news is that a furnished holiday let is now more tax efficient than a property rented out on a conventional shorthold tenancy. HMRC is scrapping mortgage interest relief on buy-to-lets but it still applies on furnished holiday lets as they are treated as a business.

Mortgage interest costs can be offset against any rental income for tax purposes, along with council tax, utility bills and repair costs. To qualify, your property must be available for let at least 210 days of the year and has to be rented out for at least 105 days.

While a holiday let can earn three times more than a conventional rental, investigate how many weeks a year you are likely to be able to let it. Ask good holiday lettings agents for their opinion so you can estimate the possible financial returns.

Don’t forget to factor in the extra costs and work involved with a holiday let. It is a competitive market, so your property needs to be well presented and in the right location.

It pays to get a good agency to manage it for you. They will sort maintenance issues, handovers and cleaning. However, they may charge 20% to 30% plus VAT on each holiday rental for full management.

When looking at what to buy be aware that some leaseholds prohibit holiday letting.
Whether you are buying as a second home or a holiday let, consider buying new.
These often come with designated parking and there will be fewer maintenance issues, which is a huge plus if you are planning to lock up and leave or if you are an absent landlord. If you buy second-hand then ensure you get a comprehensive survey so you can tackle any potential issues.

Publish date: 13/08/2018

Publisher: New Home Finder

Url: https://www.newhomefinder.co.uk/new-home-info/lifestyle/fancy-a-holiday-home-by-the-sea