Holiday Lets Targeted in the 2024 Budget

Even as an established estate agency with longstanding award-winning Lettings and Property Management departments, we are noticing a shortage in rental properties. The reason for this is a complex one and varies depending on the location. There continues to be an increasing demand for properties, and we are noticing that tenants are generally ‘staying put’ and not moving as often as they have previously done so. This could be due to there being limited choices of properties for them to move into. We have seen in some areas an increase in holiday lets and ‘Airbnbs’ which has reduced housing supply not only in popular tourist areas such as the Northumberland Coast but also for example in Newcastle City Centre and Quayside as well as Durham City. We have also seen an impact of legislation such as selective licensing reducing the number of properties in some areas, as landlords find that they properties do not comply with stand.   
  
Reducing short term lets is now on the Government agenda, a consultation published recently by the Department for Levelling Up, Housing and Communities will propose introducing planning permission for an existing home to start to be used as a short term let. The 2024 Spring Budget on 6th March brought with it some significant changes that will affect all landlords in general and owners of Furnished Holiday Lets in particular. 

The Furnished Holiday Lettings (FHL) tax regime will be abolished from April 2025, in an attempt to combat the housing crisis in popular UK holiday destinations, where local people struggle to find homes. This is largely because of landlords converting properties to holiday lets in order to maximise tax benefits. 

The effect of abolishing the rules will be that short-term furnished holiday lets, and longer-term residential lets are treated the same for tax purposes and individuals will no longer need to report the two income streams separately. 

We have a large number of tenants waiting for rental properties across the North East and if you have a property available to rent out please contact our teams who would be happy to help.