The recession saw a fall in house purchase activity, including those buying property for holiday letting purposes. However, in the last twelve months, we have within Cumberland Business seen a steady growth in enquiries from potential purchasers looking to invest in property in the Lakes. There may be a number of reasons for this; one may be that property prices in general have remained quite static in the Central Lakes. Potential purchasers, possibly waiting for a bargain and holding off, are now more confident and are starting to purchase just in case property values increase in the future. Serviced accommodation in the Lakes continues to achieve high occupancy levels although this of course depends on the quality of the property and its location. The widely held view is that with airline strikes, ash cloud disruptions and poor exchange rates resulting in increased cost of foreign holidays, there will be more people spending their holidays in the UK, further increasing occupancy levels and income for the holiday home owner.

The growth in new purchases may also be a result of the continued low interest rates being achieved on other investments, and the desire to invest in bricks and mortar. The holiday letting income can assist in servicing the borrowings, and owners still have a holiday home which they can use for their own use if they desire.

What will be interesting is whether this growth will continue in the future? As the government looks to tackle the debt mountain, we will no doubt see increased taxation in one form or another and removal of tax benefits which may put off potential purchasers, or lead to the existing holiday let property owners selling their properties. It is clear however that many of these properties are purchased for personal reasons rather than purely for investment purposes. Purchasers often want a home they can retire to, and/or somewhere that can be used for their own holidays when vacant.

Despite the rise in Capital Gains Tax for higher income earners, I suspect that on the whole, the market and demand for holiday let properties will remain strong.