What is a holiday let?
A holiday let is a property rented to holidaymakers for short periods of time. To qualify as a holiday let, the holidaymaker that the property is let to must genuinely occupy the property for the purposes of taking a holiday. If the property is not occupied for a holiday the property is not a holiday let, regardless of what the parties believe or what the rental agreement says.
What is a holiday letting agreement?
Holiday lets are generally rented out using a holiday letting agreement. This is a short-term rental agreement between a landlord and their paying guest, setting out the terms of the let, including the amount of rent to be charged.
Why use a formal agreement?
If a landlord wants to rent out a property to paying guests, they should make sure that they and their possessions at the property are protected.
If things get broken or an occupant refuses to leave a holiday property, having a comprehensive letting agreement in place allows the landlord to take action quickly, helping them to get the result they want while minimising time and expense.
It is important to set out in a holiday letting agreement what the landlord expects from their guests whilst they are in the property and what is included in the rental.
It’s good practice to use an Inventory to list all of the items in and at the property so that both parties know what is there. Any breakages can be deducted from a deposit taken at the start of the letting.
Can I use any rental agreement?
A holiday letting agreement is generally used to make sure that holiday let guests do not obtain any rights to stay in the rented property past the agreed time (eg by being considered to be occupying under a tenancy).
A holiday letting agreement makes it clear to guests that they are only able to stay at a property for holiday purposes and that no tenancy is created. Other types of agreements generally do not contain this wording.
What is a furnished holiday let?
A furnished holiday let (FHL) is a specific category of rental property used for holiday purposes. If a holiday let is an FHL, the owner has certain tax advantages.
For a property to be classified as an FHL, it must be:
located in the UK or European Economic Area (EEA)
furnished to a standard that allows for everyday habitation (and guests must be allowed to use the furniture)
used as a holiday let by tourists and/or holidaymakers
available to rent as furnished holiday accommodation for at least 210 days per tax year (ie the period from 6 April one year to 5 April the next year)
commercially let to members of the public for a minimum of 105 days per tax year. Days that the property is rented to family or friends for free or at a reduced rate cannot be counted. Stays of longer than 31 days do not count
The property cannot be classed as an FHL if the total period during which the property was let under lettings that each exceeded 31 continuous days was more than 155 days during the tax year.
For new FHLs, the above criteria apply to the first 12 months from when the letting began. Afterwards, the criteria apply to the tax year.
For more information, read the government’s guidance on FHLs. If you require assistance determining whether a holiday let is an FHL, seek specialised tax advice from a professional tax advisor.
Specific guidance for Welsh landlords
The Renting Homes (Wales) Act 2016 introduced a new type of let known as an ‘occupation contract’, which grants tenants (also known as ‘contract holders’) greater protection than previously. Holiday lets can be rented out under occupation contracts, but generally only if the landlord informs the contract holder that their contract is an occupation contract.
Landlords who do not wish to grant extra protection (eg longer eviction notice periods) to those occupying holiday lets should make sure that they do not create an occupation contract. Ask a lawyer if you need more information.
Specific guidance for Scottish landlords
As of 1 October 2023, a landlord requires a short-term let licence to offer a property as a short-term let in Scotland. A licence must generally be obtained for a short-let property that someone manages.
For information on how to obtain a licence, read the Scottish government’s guidance.
What if a guest refuses to leave?
The steps that a landlord can take to regain possession of a property from a guest who refuses to leave depend on where in the UK the property is located.
Holiday lets in England and Scotland
Holidaymakers can stay in a property until the landlord asks them to leave or for as long as their letting agreement says. They should be given reasonable notice to leave based on the specifics of their situation. Factors that help determine what is reasonable may include how long the holidaymaker lived in the property and the periods for which rent is payable. If there is a written letting agreement in place, this should say how much notice the holidaymaker should be given.
In England, holidaymakers are considered to be 'excluded occupiers'. This means that they must leave the property at the end of the term. If they refuse, the landlord can seek possession of the property without getting a court order.
In Scotland, holidaymakers staying in short-term holiday accommodation will usually be ‘non-tenant occupiers’. Like 'excluded occupiers' in England, they are awarded fewer rights and must leave the property at the end of the term. If they fail to do so, the landlord can seek possession of the property without getting a court order.
Ask a lawyer for more information.
Holiday lets in Wales
The rules regarding asking holidaymakers to leave property in Wales are complex.
If a landlord tells a holidaymaker that they are renting a property under an occupation contract, the holidaymaker will be awarded certain rights under the Renting Homes (Wales) Act 2016. This means that the landlord will generally only be able to evict them in certain circumstances (eg using a Section 173 Notice giving at least 6 months’ notice).
If the landlord does not give notice to the holidaymaker that they are renting the property under an occupation contract, the holidaymaker will generally be treated as an ‘excluded occupier’. Excluded occupiers in Wales, like those in England, have fewer rights. Excluded occupiers can remain in a property until the landlord asks them to leave or for as long as their agreement says. They should be given reasonable notice to leave.