Buying a Holiday Home Abroad vs. in the UK

When looking into buying your first holiday let, it can be hard to decided whether or not you want to purchase your property in the UK or abroad.

Before you decide to take the plunge, find out the key pros and cons for buying a property in the UK vs buying a property abroad.

Benefits of Holiday Letting in the UK

Brexit

We have to mention it. Brexit is one of the key factors in this debate. The UK has left the EU, but what does that mean for those that own/want to buy holiday homes overseas?

When leaving the EU, the UK also left the EEA (European Economic Area). Members of the EEA are included in the EU single market, and have to be compliant with its rules and regulations, most importantly the movement of goods, capital, workers, and the provision of cross-border services.

Once the UK left, UK owners of property in the EU lost perks such as tax breaks. For example, if your overseas property is classed as a Furnished Holiday Let, you will not qualify for the tax benefits that furnished holiday let owners in the UK would continue to receive.

Since Brexit, the value of pound sterling has decreased since the referendum (10% down against the dollar and 10-15% down against the euro). Although a negative for those traveling abroad from the UK, it is a positive for the UK tourism economy.

This is because more people are staying in the UK for a staycation, and more visitors from overseas are predicted to holiday in the UK due to it becoming a cheaper destination.

Straightforward Travel

Hop in your car and you could be at your holiday home in a matter of hours. No airport security, flight delays, or waiting at the baggage carousel for your luggage.

Less Likely to be Caught Out by Hidden Costs

When owning a holiday home abroad, it is best to check through all the costs and possible charges. Charges that may not be applicable when buying a holiday let in the UK could be customary in certain countries overseas. Language barriers can also make this process fairly stressful.

Easy to Get to

It's rare, but sometimes there are issues at your holiday property that may need your attention. The benefit of having a holiday property in the UK is that you can easily travel there, without any restrictions, such as having to book flights etc.

Disadvantages of Holiday Letting in the UK

More Expensive

Starting a holiday let business in the UK can be a little more expensive than some properties found in Europe. A beautiful property in the south of France could cost up to 50% less than a UK property of a similar style.

This has put some property owners off, however, many believe that the benefits of owning a UK property outweigh the cons.

Local restrictions

Scotland recently announced that they are going to be implementing some restrictions on people buying holiday lets, meaning that you would need a license to buy in Scotland.

New plans for licenses in Scotland have been called the Scotland Short Term Accommodation Licensing Scheme.

With this in mind, some other regions across the country may introduce similar licenses, with North Wales already flirting with the idea of tightening the rules on second homes.

Unpredictable Weather

Although the seasons can be beautiful in the UK, the weather has a notorious habit of being unreliable and unpredictable.

Over the recent years we have seen some of our hottest days in months like May and September whilst seeing downpour in our summer months of June-August.

The weather can have a tremendous impact on how much your guests enjoy a stay at your property. Poor weather can lead to limitations on your guests experience of the local area, meaning they could be less enticed to come back again.

Some properties rely heavily on a certain type of weather, particularly beach homes, to attract guests. This means that if a guest stays at your property for a short period of time and does not get the weather they were expecting, they could be less likely to stay again or leave a positive review.

Benefits of Holiday Letting Abroad

The Weather

One big advantage that overseas holiday lets have is the weather. Dependent on where your chosen property is, you are almost guaranteed predictable weather. A relief from the unpredictable weather conditions here in the UK.

For example, the average max. temperature in Nice is 27.8°c, in the Algarve it is 28.5°c and along the Costa Del Sol it is a scorching 31.3°c. All of which also average less than 23mm in rainfall over August. These figures can seem awfully tempting when compared to the average max. temperatures of 20.3°c and 18.5°c, and average rainfalls of 74.7mm and 100.1mm in St Austell and Buxton over August.

Figures courtesy of The Met Office.

More for your Money

Even with the drop in value of pound sterling, you may find that you can get slightly more for your money in certain areas overseas than in the UK. This is especially the case if you are looking in areas that aren’t necessarily in sought after locations, where high demand means higher prices.

Some of the more rural areas of France and Italy have been known to sell for a fraction of the cost for an average UK home.

The Culture

For many people, a holiday abroad is not just about enjoying the fabulous weather. It can be about a complete change of scenery, experiencing a different culture, sampling local delicacies and even finding a place you truly feel at home.

Disadvantages of Holiday Letting Abroad

Language Barrier

Although your guests may enjoy the idea of experiencing a change in language when staying at your property, for you this may cause some problems.

For example, understanding holiday let mortgages and insurance can be complicated in your own native language. When taking on large amounts of important information in a foreign language, you may become extremely overwhelmed.

Managing from a Distance

Trying to manage a property from overseas can be a difficult task, especially when added to the issue of a language barrier.

With the fragility of travel regulations due to the Covid-19 pandemic, there is no certainty that you will even be able to get your property abroad.

Brexit

The majority of holiday homeowners tend to own properties in popular European destinations such as Spain, the Canary Islands, Turkey and Greece. This is due to the fact that many Britons see these destinations as their first choice holiday destinations abroad.

As the UK has left the European Union, it has become significantly more difficult to own your own property abroad. Expect to be slapped with hefty fees before you even attempt to purchase a property abroad.

Your Own Holiday Time

Once you own a holiday let abroad, you will be more inclined to be tied down to that one singular location. This is especially true when you are required to conduct some maintenance on your property in your downtime.

It is hard to experience more of the world once you are obliged to visit just one location.

Summer vs Winter

Unfortunately, your property abroad may struggle to entice people all-year-round. Only some of the few unique and highly sought after properties will achieve this.

With this in mind, your property will be either suited for winter or summer breaks. Properties by the Alps will cater more for the winter ski trip thrill-seekers, whereas coastal homes on the Mediterranean Coast will be ideal summer spots.

Think about how much income your property will generate over the year and whether or not it will cover your holiday let mortgage costs. Use our Holiday Let Income Calculator to receive data-driven earning estimations.