As the world’s top cyclists prepare to hurtle up hill and down dale when the Tour De Yorkshire gets underway on Thursday, May 3, new research has revealed the most attractive yields along the course for holiday let investors.
Mark Cavendish and reigning champion Serge Pauwels are star riders at the event, which last year boosted the Yorkshire’s economy by an estimated £64 million and attracted 2.2 million visitors to the region.
But it’s not only the cyclists and tourists who will be riding high this year. A study by buy-to- let mortgage lender Together, which specialises in finance for holiday lets, has revealed the best opportunities for investors to achieve healthy rental yields across the region.
The specialist lender used Land Registry house price statistics and estimated rental data from holiday let booking firm Airbnb to calculate rental yields in locations around the route for the 2018 tour.
“Millions of people are expected to join in the riot of colour and celebration which has come to epitomise the Tour de Yorkshire race, and these spectators will be looking for a place to stay,” said Daniel Owen-Parr, head of professional sector and auction at Together.“Many will be visiting Yorkshire for the first time to watch the race but may return again and again once they see Yorkshire’s natural beauty and history, its bustling market towns and scenic coastline - providing great opportunities all year round for savvy investors.”
Holiday let landlords buying property near Swinton in South Yorkshire – part of the Barnsley to Ilkley stretch of the 2018 tour – could achieve rental yields of up to 13 per cent, putting it top of the pile as a potential investment opportunity.
Meanwhile, yields in Masham, North Yorkshire, home to the famous Black Sheep Brewery and a checkpoint on the fourth stage, could bring up to 7.9 per cent for renting out a holiday flat, according to Together’s research.
Investors targeting property in Halifax, where the tour route was announced last September, can achieve yields of up to 7.6 per cent, while those looking to Craven, which includes Skipton and popular parts of the Dales, could achieve yields of 7.1 per cent.
Holiday rental yields for a flat at Old Pool Bank, near Leeds – where the professional riders tackling this year’s tour face a daunting 1k climb at a 10 per cent gradient – can reach six per cent, the study
The figures compare favourably to the average rental yields for buy-to- let overall, which stand at 5.9 per cent in Yorkshire, the same as the UK as a whole. However, traditional buy-to- let has taken a hit in recent years because of new taxes on rental revenue. From April 2016, there have been reductions in the amount of mortgage tax relief landlords can claim. However, this doesn’t apply to holiday let investors, who can still set their full
mortgage interest payments against tax. They can also furnish their holiday property and deduct the entire cost from pre-tax profits and, when they come to sell, they may qualify for reliefs meaning that capital gains tax is minimised.
Other holiday let hotspots on the Tour de Yorkshire route include Haworth, where the average house price is £122,437 and the yield 6.9 per cent; Hebden Bridge, with an average price of £146,385 and a yield of 6.5 per cent; Helmsley, where the average price is £200,500 and the yield is 6.3 per cent and Hornsea, where the average house price is £149,300 and the holiday let yield is 6.2 per cent.