British expats with holiday homes told to return to the UK
- UK residents with holiday homes in Europe told to return to Britain
- British expats sign a petition to negotiate their post-Brexit equal rights
- Demand for UK holiday rents increase in 2021
- Is now a good time to transfer money from the UK to Europe?
According to recent reports, the European Union (EU) is advising British expats living in the EU or UK residents with holiday homes in Europe to return to Britain post-Brexit.
Under the current EU rules, UK residents that own holiday homes in the bloc cannot stay in any member states for more than two non-consecutive 90 day periods each year.
The EU’s rules contrast the UK’s as EU residents visiting Britain can stay in the country for up to 180 successive days each year.
Many British expats have contested the new rules and signed a petition urging the UK government to renegotiate the rights for holiday homeowners.
If approved, UK residents with property in the EU could enjoy stays in Europe for up to six consecutive months a year.
However, not everyone favours the petition, with some EU citizens criticising expat lobbying on an online forum.
According to news reports, some forum users condemned demands to change the laws, arguing that some Britons have been residing illegally despite instructions to register their residency.
One user condemned Brits who had not applied for residency out of fear that they would lose their UK benefits.
Another forum user wrote: “I have NO SYMPATHY with those suddenly finding the perks they have been enjoying for years have disappeared.”
“If you live in an EU member state for more than three consecutive months, you must apply for residency. The rules have always been absolute, but many didn’t apply for residency because they thought they could escape the law.”
Following the termination of the UK government’s EU Settlement Scheme, the subject of rights for British expats staying in the EU has been hotly debated.
Although UK residents with European holiday homes were told to apply for residency to protect their rights, many Brits have accused the EU of treating expats poorly and called for British Prime Minister Boris Johnson to “rip up the Brexit treaty.”
One reader expressed their disapproval, stating, “the EU had the intention of making things as difficult as possible for post-Brexit Britain.”
Another reader suggested that if PM Boris Johnson permitted the same treatment of EU expats, the bloc would be in an uproar.
Brexiteer Jayne Adye, involved in the Get Britain Out campaign, has also commented on the developments, stating: “The bloc has subjected UK expats to a multitude of unnecessary checks and restrictions, as well as trumped-up costs for administration tasks, such as getting a European Drivers Licence.
With travel across the bloc clouded by post-Brexit uncertainty and ongoing coronavirus restrictions, there has been an increase in demand for holiday lets in the UK and staycations are set to boom in 2021.
Staycation 2021: Where to find profitable holiday rentals
According to research conducted by a private banking company, Arbuthnot Latham, in the last three months, searches for staycations in Britain has surged by 73% year-on-year.
There has also been a significant increase in the number of properties offering accommodation for larger parties of 10 or more guests as uncertainty over travel abroad has renewed interest in domestic holidays.
Arbuthnot Latham’s study suggests that staycation demand is outstripping supply, presenting investors with the perfect opportunity to purchase a UK holiday rental.
Income generated from holiday homes tends to generate a higher gross yield than buy-to-lets, making them a more profitable long-term investment. That said, investors will need to consider other factors when entering the short-term rental market to maximise revenue opportunities.
Besides general maintenance and servicing costs, occupancy numbers, security and privacy conditions, the property’s location is equally as important.
Top countryside locations for 2021
According to a survey conducted for hotel platform Hoo to determine which holiday lets generate the best rental yields for investors, Bangor, Wales leads with a rental yield of 4.7%, followed by Dumfries, Scotland and Bury St Edmunds, Suffolk with 4.1% respectively.
The survey found that countryside locations, which entice holidaymakers with their enchanted woodlands and picturesque landscapes, typically offer annual rental yields of 3.5%, so the destinations mentioned above are highly competitive.
The Lake District is also a holiday hotspot, and investors can expect to generate annual rental yields of more than 8% in some rural areas of Cumbria!
What coastal locations offer the best return on investment?
Coastal towns are attractive getaway destinations for Brits, with popularity peaking over the summer months and school holidays.
Seaside towns offer holiday-goers the perfect combination of sand, sea, sun and entertainment – making it an ideal location for a holiday home investment.
According to Hoo, investors can look forward to a return of between 2.7% and 3.9% on properties located in coastal towns, with monthly rent averaging at GBP 673.
Holiday hotspots such as Brighton and Eastbourne have been outshined by areas such as Tynemouth and Crosby, which both offer returns of 3.9%, says Hoo.
Holiday homes in the city offer the best return
Investors can find the best returns on holiday lets in the city, with annual yields on property in metropolitan areas averaging at 4.6%, compared to 3.5% for countryside property and a 3.3% return on homes in coastal towns.
Not only are city destinations suitable for every holiday type – a couples getaway, solo trip or family holiday but they are cheaper to purchase than countryside property and seaside homes.
According to Hoo, investors will receive the best return on investment in Glasgow (7.2%), Belfast (6.2%) and Newcastle (5.6%), with house prices averaging at GBP 149,565, GBP 140,750 and GBP 167,246, respectively.
Unsurprisingly, housing prices in London are high, making the capital a challenging price destination for investors. However, given the resilience of the UK housing market during the coronavirus pandemic, we expect Britain to remain a long-term investment choice.
Overseas investors can also enjoy an array of discounts due to UK Chancellor Rishi Sunak’s stamp duty holiday despite the new 2% surcharge for non-resident buyers.
While the stamp duty holiday will conclude at September-end, recent reports and surveys show that its tapering down has had minimal effect on interest in British property.
In truth, research conducted by ludlowthompson estate agents revealed that the number of overseas landlords in the UK had hit a five-year high – added reassurance for any prospective investors.
Andy Foote, director at SevenCapital, said: “The new surcharge is a seemingly small price to pay for a potentially lucrative asset.”
Furthermore, as pound Sterling (GBP) is strengthening and UK property prices continue to rise, those that have purchased property or are considering doing so over the next few weeks and months will benefit significantly from the more favourable exchange rate.
Pound Sterling: Is now the time to transfer money from the UK?
After months of choppy trade due to Brexit, pound Sterling (GBP) has rebounded in 2021, surging to multi-year highs against a host of major currency rivals, including the euro (EUR) and the US dollar (USD).
The British pound to euro (GBP/EUR) exchange rate entered 2021 at the EUR 1.11 level and is now trading above EUR 1.15, while the British pound to US dollar (GBP/USD) pair, which opened 2021 at USD 1.3674, is eyeing the USD 1.40 level at the time of writing.
Recent momentum in pound Sterling (GBP) exchange rates has given way to hope for a more long-term sustainable rally, which is excellent news for property investors and prospective buyers.
Suppose someone purchased a foreign property in Europe last year for EUR 300,000. As the British pound vs euro (GBP/EUR) pair has appreciated by more than 3.5% in 2021, the value of that property has also increased by the same amount, and the positive outlook for GBP should translate into further gains.
However, those with GBP transfer requirements may want to take advantage of the rate now as the COVID catastrophe across Asia and uncertainty over new mutant strains poses a downside risk.