3% of the population are buy-to-let landlords. Traditionally, this occupation has been associated with furnished holiday lets or long-term rentals; however, the steadily increasing popularity of serviced apartments in the corporate world has meant that another option is now available.
There are many benefits of becoming a serviced apartment landlord; first of all, if signed up to the correct agents, serviced apartments will rarely be empty. Business travel is a commercial necessity and the corporate travel market is worth over £10 billion every year in the UK alone. With stays often lasting 30 days or more and with over a third of business travellers having taken a partner on a business trip, it is no wonder that business travellers are looking more and more to places that offer a degree of home comfort.
60% of business travel in the UK is domestic and the majority to London, an area where serviced apartments are extremely high in demand. A top priority for these business travellers is comfort; serviced apartments provide a much higher level of comfort than a hotel can offer for the same period of time.
Furnished holiday lets are another option for corporate travellers. Landlords of furnished holiday lettings are beginning to realise that occupancy rates, and therefore profits, may be higher if they cater for the corporate market. The increased demand for serviced apartments means that demand now outweighs supply in some areas.
Furnished holiday lets have always been a more attractive option for landlords because they have been treated as trade and have therefore received preferential treatment from the taxman. This has included some capital gains tax relief such as entrepreneurs’ relief, business asset rollover relief, relief for gifts of business assets, and relief for loans to traders. Capital allowances have been another draw for furnished holiday letting operators.
However, this is set to change from April 2011, when harsher restrictions being put in place will increase the number of days a property will need to be let each year to qualify as a furnished holiday let. Many FHL landlords are therefore now reviewing their current position and considering alternatives. This, coupled with the seasonality of holiday lets, means that there has never been a better time to become a buy-to-let landlord.