Landlords that are considering using a property as a second home or as a holday let need a holiday home insurance policy.

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It sounds perfect: buy a property somewhere you enjoy visiting (and perhaps plan to retire to), use it when you like, and get it to pay for itself the rest of the time by running it as a holiday let. In reality, a lot of landlord insurance customers operating holiday lets are glad to break even in this competitive and labour-intensive market. However, this is an expanding market: more than 4 million people rent cottages and holiday apartments every year, and self-catering holidays are increasingly popular.

Most holiday lets occur during the period of about 20-30 weeks covering late spring, summer and early autumn, but city properties are a likely bet all year round, and there can be high demand at Christmas and New Year. Standard lets are by the week, but weekend and mid-week breaks are popular, again especially in cities.

Typical locations

Obviously there are hotspots such as the Lake District, seaside resorts and major cities, such as London, York and Edinburgh, but the market for holiday lets is wide ranging. Pretty rural or seaside settings are extremely attractive, and a site close to shops and with good transport links is likely to attract valuable repeat bookings. City properties should be as near the centre as possible, and certainly with good transport links. Elsewhere, the most attractive holiday lets are those that are conveniently situated among the local attractions, rather than on the edge of a popular region. A rural location might look attractive, but it could be vulnerable to burglars because it will be left unattended, and is likely to be equipped with attractive, portable equipment. You need a good burglar alarm.

Holiday lets are a quick turnaround business where the property needs to be freshened up between lets of a week or two, so either you will need to be on hand as a regular commitment, or you will need to find someone to do it for you: you can’t run it yourself properly from a distance.

There are strict rules as to what constitutes a holiday let. A holiday let must be in the UK, furnished, available for letting for at least 140 days a year and commercially let (not at cheap rates to family and friends) for at least 70 days a year, with the lets not exceeding 31 days.