The number of people choosing a ‘staycation’ in the UK rather than a holiday abroad has been increasing year on year. This, combined with the fact that the UK is a popular holiday destination for people from overseas, has contributed to a boom in the British holiday trade. There is an increasing number of opportunities for people who own property in popular UK holiday resorts, so buying a holiday home in Salcombe, for example, can mean a healthy profit from renting out accommodation to holidaymakers.
With over 6 million tourists visiting Devon annually and a tourism trade worth £0.56Billion (source), Salcombe is a great location to buy a holiday home.
We chatted to local estate agent Harriet George, Salcombe’s leading independent property expert, to discover what you need to know if you’re considering buying a holiday home in Salcombe.
Harriet George is Salcombe’s leading independent property expert with unrivalled local knowledge. Helping property owners and buyers in Salcombe and South Devon, my goal is to exceed expectations and offer the highest level of customer service. For any property related enquiries please get in touch:
Why is Salcombe a great place to buy a holiday home?
Salcombe is located on the southernmost tip of the South Hams, a designated area of outstanding natural beauty. It’s the jewel of the South Hams, and this pretty town with terrace-upon-terrace of pastel and white coloured houses leading down to the shops and boatyards makes an instant impression.
One of the biggest appeals of this town with a villagey feel is that it caters for all generations; sandy beaches, fabulous coastal walks, a sheltered harbour for sailing and a fabulous array of high-end clothing shops, independent boutiques, art galleries and a wonderful selection of pubs, restaurants and cafes means there really is something for everyone.
The town is small and friendly which creates a wonderful village-like atmosphere. For many parents, it affords their children the opportunity to experience the freedom that perhaps they don’t have at home.
Is buying a holiday home in Salcombe a good investment?
Historically buying a holiday home in Salcombe and the surrounding area has proved to be a good investment. However, I think it’s important to take a medium to long-term view as capital growth in the short term is never guaranteed.
Buying a holiday home provides an opportunity to generate an income and also enables you to own a property for you and your family to enjoy for a few weeks a year.
The return on investment depends on a number of factors such as location, features and the profile and number of guests you can accommodate; so my advice is always to get income projections from a reputable letting agent like Salcombe Finest www.salcombefinest.com.
It’s important to remember that second home purchases in the UK are subject to an extra 3% Stamp Duty on top of the regular tiered rates. With changing tax rules on buy-to-let properties, many people have seen short term holiday lets as an increasingly attractive option. When you come to sell your holiday home you’ll be liable to pay Capital Gains Tax, however with holiday lets classified as a business there are tax benefits which an accountant would be able to confirm.
What is the average cost of buying a holiday home in Salcombe?
According to Zoopla www.zoopla.co.uk, the average price of a property in Salcombe in February 2020 is £685,231. A one-bedroom cottage in the middle of town with a great letting history has just sold for about £300,000, whereas you would pay about £1,750,000 for a 4 bedroom modern waterfront property. The range between £500,000 and £1,000,000 is a popular bracket for those looking to buy a holiday home to let.
What are the most desirable locations to buy a holiday home in Salcombe?
The centre of town is probably the most popular location for a lot of buyers, anything within a 10-minute walk of the shops and boat park/mooring pontoons means you can park your car and not worry about moving it again until you leave.
The pastel-coloured cottages on Church Street, Courtenay Street and Buckley Street are popular, as are the red-brick terraced houses on Coronation Road.
Lower Batson with its picture-perfect cottages and tranquil ambience is sought-after, as is North Sands with its year-round dog-friendly beach and home of the infamous Winking Prawn; however, properties for sale in both these locations are rare. The whole of Salcombe is hugely desirable so really it’s about choosing a location that’s right for you.
What features should I be looking for when buying a holiday home in Salcombe?
I believe that outside space is hugely important, even if it’s just a terrace or balcony, somewhere to sit for morning coffee or a Salcombe Gin after a day on the beach or water is highly valued.
I also think that people like to wake up in the morning and know they’re in Salcombe, so a view is often high on the wish list.
In my experience, however big the budget, there’s always a compromise so it’s important to appreciate that and work out what you’re most prepared to manage without.
What features can I add to make my holiday home more profitable?
In my opinion, guests are looking for a little more luxury than perhaps they did 10 years ago and the holiday home market is competitive.
A fast internet connection is essential in this day and age as are quality furnishings, Sonos systems and Nespresso machines with complimentary Salcombe Brew pods.
I’ve always been told by letting agents that flexibility is key when it comes to maximising income, short breaks are increasingly popular in the UK and allowing a dog could also boost income. Add-ons like complimentary membership to the Salcombe Harbour Hotel and Spa is also a feature which could improve occupancy, particularly out of season.
Should I use an agent to look after and let my holiday home?
Owning and renting out a holiday home can be a lot of work so I would always advise using a reputable holiday letting company to advertise and market the property on your behalf. Many agents offer different service packages so you can choose which is right for you.
What mortgage, insurance and legal documents do I need if I want to let out a holiday home?
If you’re looking to raise a mortgage on a short-term holiday let property then you’ll need a specific mortgage. The number of lenders who offer these types of mortgages is more limited however The Principality Building Society has always stood out as being user-friendly and efficient for my buyers.
A letting agent will be able to advise on what’s required to prepare your property for letting but it’s likely to include gas and electrical checks, a fire risk assessment and safety guidelines for any pools or hot tubs. In terms of insurance, I would contact a company who’s experienced in providing this type of cover, I normally suggest www.sabreinsuranceservices.co.uk in Kingsbridge.
What maintenance costs are involved in owning a holiday home?
A reliable and honest caretaker is essential when it comes to looking after your holiday home. They’ll be able to identify any issues that need addressing and ensure the property is maintained to the standard that guests expect. We’re very lucky to have so many local companies dedicated to providing this service in the Salcombe area. Luxury holiday lettings agent Salcombe Finest will be able to advise you on a good match for your home.
How much can I expect to rent out my Salcombe holiday home for?
Rental incomes will vary depending on the features, size and location of the property. Typically a luxury waterfront 2-bed apartment in high season is around £2,995 per week and £1,295 per week in low season. A larger 4-bed property with luxury extras is approximately £4,950 per week in high season and £1,950 in low season.
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If you’re considering buying a property as a holiday let and would like to find out more about how Salcombe Finest can help you to let your property, or you already have a property that you would like to let, then please give us a call on 01548 706 706 today and we’ll be happy to help.