Short-term let over the winter to cover energy prices?

Short-term let over the winter to cover energy prices?

10:02 AM, 11th August 2022, About 2 months ago 11

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Hello, We have a holiday let and as the cost of living climbs… are considering putting our 5-bed holiday house in Norfolk, that we live next-door to, on a short term let over the winter months. Our questions are:

We understand anything more than 30 days risks losing our holiday let status with the council (and thus our tax exempt status). If we were to ask the tenants to pay rates for say, 4 months on a short-term let, then re-start the holiday lets, are councils open to this type of arrangement eg: is it easy to get council tax exempt again?)

Imagine we’d have to also stop offsetting our mortgage interest against tax for this period…?

Insurance – I am across the implications of this (and notifying the mortgage company).

We have only ever offered holiday lets via Airbnb and long-term lets. Are there any short-term let pitfalls eg: possible problems getting tenants out of the property after 4 months if they refuse to leave? Is it best to have a six-month arrangement (say from Oct-March?)

Hoping to offer it fully furnished but all bills/their costs covered by the tenants. May suit a family building a house or relocating…? Would love your guidance and thoughts, all welcome!

PS The only reason we are considering this is a/ reducing the holiday let turn around work and b/ principally because with energy costs are skyrocketing we think renting as a holiday let will be costly and hardly worth it.

Thank you again.

Maz



Comments

Neil Patterson View Profile

10:06 AM, 11th August 2022, About 2 months ago

Hi Maz,
You have to be very careful this is not to be a tenant's main residence and then an AST by default.

Maz

10:19 AM, 11th August 2022, About 2 months ago

Reply to the comment left by Neil Patterson at 11/08/2022 - 10:06Hi know of someone who did similar in London. She used a 6 month rental agreement for her flat (for people who were renovating their house nearby) and stated within it that the first 4 month's were xx pcm (as that''s all they initially wanted)... then from the 5th month onwards the price dramatically increased - all signed prior to the tenants moving in. If they overstayed it would certainly encourage them to move on. She's a judge (barrister) so guessing it's legal...?!

Jerry Stone

12:31 PM, 11th August 2022, About 2 months ago

Interesting.
You cannot legal issue a tenancy agreement for a period of less than 6 months FYI.
There is a risk that on the horizon is going to be the end of Section 21 notices so you would need to look at how you terminate the agreement?

I am not sure where you get this about 30 days loosing your holiday let?

It is not a holiday let agreement. Its small business rate relief form business rates.

I don't know of any particular time restrictions or why there would be?

There are plenty of wind farm projects going on at the moment around Great Yarmouth and I have a client who has several properties rented out to workers. They are not there very often and are on a room let basis.

You could de-register it and then re-register it but in all honesty I wouldn't bother.

I would recommend joining the NLRA National Landlords Association. It's £75 and all the legal agreements and advice are on there.

Maz

16:02 PM, 11th August 2022, About 2 months ago

Reply to the comment left by Jerry Stone at 11/08/2022 - 12:31
Thank you. Yes I meant 30 days re council tax relief status. Is there anyone I could contact to register with the GY workers? In case they need additional accommodation over winter?

Darren Peters

18:37 PM, 11th August 2022, About 2 months ago

Reply to the comment left by Maz at 11/08/2022 - 10:19
We're about to do something very similar. It's helpful to know a barrister deems it legal.

We would word it something like the rent is £2500pcm reduced to £1,000pcm for the first four months.

DSR

10:33 AM, 12th August 2022, About a month ago

leave empty? Save ALL the paperwork/complication/time on it all - If no utility usage /very little then all there is are the standing charges??

Judith Wordsworth

8:56 AM, 13th August 2022, About a month ago

Reply to the comment left by DSR at 12/08/2022 - 10:33
Heating will need to be left on if empty. Some insurers require 14 degrees 24/7

Maz

10:24 AM, 13th August 2022, About a month ago

Reply to the comment left by DSR at 12/08/2022 - 10:33
Yes starting to think this may be the best way to go - have it avail as a holiday let at a high rate. If someone wants it for a few days then fine, otherwise it may not be worth the drama, just keep the heating on and do some renovations over winter.

Thank you all for your feed back. It's an interesting one as I think there are others with holiday lets doing short term lets in this way over the winter months. With energy prices so high this year though it's unlikely to be worth it.
Would still be good to get more feedback to possibly help others too.... Thank you again!

Darren Peters

10:31 AM, 13th August 2022, About a month ago

What’s your estimate of holding costs if empty? Ie minimum utility standing charges &council tax,

Maz

12:31 PM, 13th August 2022, About a month ago

Reply to the comment left by Darren Peters at 13/08/2022 - 10:31
Max of about £600pcm but arguably could earn iro £3kpcm with tenants paying their own bills. Big faff changing over all the bills etc though and I'm not keen on risking having to serve a S21 or get into any complications.... So the odd weekly rent may be best to reduce the hassle...?

Just read another historic holiday let post on Property118 which touched on an over winter day allowance to rent while still retaining FHL status. Have any of you heard of this? Also someone else suggested renting on a monthly basis.

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