Meet Mark.

Mark, the landlord of a holiday let in Maulden, listened with interest to the Spring Budget.

Mark is confused as to how these changes will affect him and his property.

Don’t be muddled like Mark…

Do understand the basics.

• Jeremy Hunt announced the abolition of the Furnished Holiday Lettings regime as of April 2025. This will soon cost Mark an average of £3,000 a year.

• Councils across the UK have been voting to increase council tax for holiday homes, and there’s little doubt Bedfordshire councils will follow suit in the future. This is likely to cost Mark an extra £2,000 a year.

• The rate of Capital Gains Tax for residential properties will decrease from 28% to 24% from 6th April 2024, so disposing of his property instead would see a small tax relief for Mark.

These costs combined could end up costing an extra £5,000 a year out of Mark’s pocket, or 4% more in his bank. But they’re not the only figures he should be factoring in…

Do the proper maths.

Mark’s been renting out his holiday home for £2,500 a month, which is £30,000 a year. But there’s no guarantee he’ll be able to fill the home 100% of the time.

If average occupancy sits at 65%, that’s actually only £19,500 each year.

Take off council tax and it’s more like £17,500.

Minus gas, electricity and water, and that figure comes down even further.

And that’s before he’s factored in costs to maintain, to fix any wear and tear, and to furnish.

Do look at the options.

There’s somewhere in between carrying on with a holiday let in more unfavourable conditions and selling off entirely. With a longer-term tenancy, Mark has stability, and will still see substantial gains.

Let out through an AST, Mark’s property could convert to £1,800 a month in rental income—£21,600 a year. He’ll need to take out any agency fees, but he’ll also see his property increase in value over the time it’s tenanted.

Do use a lettings agent like Orchards.

If Mark rented his house out with Orchards, he’d receive guaranteed rent for just £250. If his tenant stops paying, up to 15 months’ rent is insured, as are the legal costs to evict, and two months at 75% of the rent once the property is vacated to give it time to re-let.

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01525 40 22 66
ampthill@orchards.co.uk