With rental yields of 10%, holiday homes on the Yorkshire coast are tempting property investors to keep their money on home shores, rather than chasing traditionally high yields in Europe and other overseas markets.

UK investors are currently benefiting from strong capital growth of about 10% per year as well as benefiting from low purchasing costs, small deposits and a straightforward legal system, says property investment advisors, Assetz.

Holiday lets can earn as much in a week as the property could achieve in a month if let on a normal buy-to-let contract. This means that if the property is let well and is located in a good tourist area, it will produce a greater annual income than a buy to let property, despite having potentially much longer void periods.

Professionally run holiday homes in the UK also benefit from tax advantages. As long as they are available for let for 140 days per year, let for at least 70 of those and are fully furnished, they are classed as a commercial business asset. Therefore, they attract business asset ‘taper-relief’, which means an upper rate taxpayer pays capital gains of just 10% on the uplift in value after a two-year period rather than 40%. This compares to buy-to-let investors who benefit only from a capital gains tax reduction to 24% after a ten-year period.

Stuart Law, managing director of Assetz commented: “Investors are searching for higher yields in order to continue profiting from their investments in light of rising interest rates, and UK holiday homes present a great opportunity.”

“If the investor employs a holiday company to manage the property, they will benefit from a hands-off investment as they will not have to worry about cleaners and maintenance, and with gross yields of 10% they will still make a profit. What’s more, they can use the property during the void periods for their own holidays – a nice bonus.”

Assetz is offering investors the opportunity to take advantage of high-yield UK coastal holiday properties with the launch of an exclusive development of 10 homes in the North Yorkshire seaside town of Filey. The coastal apartments cost from just £125,000 with yields of 10% forecast. They are fully managed and service charge is paid for the investor in the first year.  Visit www.assetz.co.uk/investors for more details.