Industry Insight Episode 03 | Holiday Let Opportunities in 2020: Insights from Harpenden Building Society. In 2020, Harpenden Building Society explored key market trends. These were part of the Industry Insight series for mortgage advisers and property investors. Topics included:
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The latest: Annexes used as holiday lets
UK Holidays Surge During Summer 2020
The summer of 2020 brought major change. Overseas trips were postponed. Quarantines were introduced and lifted quickly. Many travel insurance policies offered little protection.
As a result, UK staycations became the preferred choice. Demand for UK holiday accommodation rose sharply. Harpenden Building Society reported more enquiries about holiday let mortgages.
Annexes as Holiday Lets Gained Interest
Many buyers preferred properties with outbuildings or annexes. These were used as holiday lets within the main home’s grounds.
This reflected a shift in buyer priorities. Space for self-contained accommodation became more desirable. The need to generate additional income from home also grew in 2020.
Rise in Holiday Let Inquiries
Earlier in 2020, interest in UK holidays soared. Cottages.com recorded bookings every 11 seconds after lockdown. The BBC warned that supply might not meet demand.
Cleaning gaps between bookings reduced availability. More people also booked longer stays. This increased pressure on the UK holiday-let market.
Forward Bookings Point to 2021 Growth
Reports from The Guardian in 2020 showed 2021 bookings already underway. Many holidaymakers planned ahead to avoid missing out. The staycation trend appeared likely to continue.
Using Annexes as Holiday Lets: Real Experiences
Charles Pears, based in North Cornwall, shared his experience. He runs holiday accommodation on his own property.
“We moved to the beaches and countryside. Renting out our annexe was a natural step,” he said.
In 2020, guests were mostly British. Income covered cleaning and upkeep. The let was part of their self-assessment tax return.
The lockdown had delayed bookings. But demand later surged. The annexe offered extra space without the need for a second property.
Lending Insights: Holiday Let Applications in 2020
Harpenden lent to a couple buying a Georgian manor with an annexe. They planned to earn £20,000 yearly by letting the annexe.
The property qualified for a residential mortgage. Most of it was for personal use. Harpenden underwrote the case manually. Many lenders don’t accept mixed-use homes. Harpenden reviews complex cases flexibly.
Other examples included homes with barns, cellars, or outbuildings converted into lets. The main residence must be at least 50% of the total footprint. If you want more information, browse our blog on Holiday Lets.
Mortgage Solutions for Unique Holiday Lets
Holiday lets tied to the main home offer benefits. There was no need to manage a second property.
Homeowners gained income from unused spaces. Specialist lenders helped with applications that didn’t meet standard lending rules.
In 2020, this market gained momentum. Homeowners with annexes, barns, or outbuildings saw new potential.
Key Takeaways for 2020
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Staycations replaced overseas travel
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Annexes offered extra income
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Demand for holiday let lending increased
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Manual underwriting supported complex applications
Harpenden continued to work closely with brokers. Every case was reviewed with care.
If you support clients seeking holiday let mortgage solutions, explore our Adviser Resources. Or, learn more about our mortgage network for advisers.
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