Holiday home fever

Following a successful year, holidaylettings.co.uk recently conducted a survey of its 6,000 holiday homeowners. The results show that over half (57%) of homeowners have owned their primary holiday property for less than two years.

The volume of new investors has been a popular survey topic for most of 2006. A Mintel report in November quoted a 45% rise in the number of British households owning a second home abroad since June 2004. Many reasons have been debated for the increase including low interest rates and the convenience of economy airlines and routes.

Compared to reasons quoted by homeowners in 2005, Holiday Lettings found that the initial reasoning behind purchasing a holiday home had changed from potential rental income to capital growth prospects for 45% of homeowners. Low cost holidays remained the second most important reason for purchase, showing that a holiday home abroad is still a dream for many.

The Holiday Lettings survey also revealed that whilst rental return was no longer the initial reason for purchase, it is now deemed to be the most significant benefit of the purchase according to 67% of those surveyed.

Ross Elder, MD of holidaylettings.co.uk commented: “There has been much debate and interest surrounding the growth of ‘jet-to-let’ investment this year. Whilst our owner survey simply confirmed industry growth we also wanted to see what, if any, factors had particularly influenced this development.”

Holiday Lettings compared the research done by those who had owned property abroad for five years or less with those who had owned a holiday home for five years or more. Ross says: “We wanted to assess the influence of TV programmes like A Place in the Sun and Escape to the Country as well as the influx of holiday and travel magazines and the power of the Internet. All of which have had increasing market share and audience capture over the last five years.”

Rather frighteningly, the results revealed that neither section surveyed claimed to have done much research, relying on little more than pure gut feeling. However, TV programmes, magazines and books, property exhibitions and property and travel websites all attracted the attention of those buying most recently to some extent, but not at all those who have owned property for more than 5 years.

Sally Groves was one Holiday Lettings homeowner who bought her first property over five years ago. She now has three rental properties in Bulgaria, Sally said: “We saw the property on the internet and took a flight to view it. Being one of the first Brits to buy in the mountains of Bulgaria we asked questions in the local community and investigated the best lawyer, who turned out to be a true life saver.”

So, whilst Brits are buying abroad due to capital growth incentives (46%) with the intention of more holidays (50%) and cheaper breaks (43%), the main benefit reaped from these investments is rental returns (67%).