Google searches for “furnished holiday let tax changes” have skyrocketed by 1300% over the past year following the UK government’s decision to abolish the Furnished Holiday Letting (FHL) tax regime from 6 April 2025, according to holiday home specialist, Intasure.

With thousands of landlords and investors set to lose tax advantages, mortgage and insurance brokers could well see an increase in client queries regarding refinancing, tax planning, and insurance adjustments.

With 257,000 properties in England currently registered as short-term lets, many landlords will be reassessing their portfolios—some may transition to long-term rentals, while others could sell or convert properties to personal holiday homes. This presents both challenges and opportunities for brokers advising clients on lending and protection strategies.

END OF FHL TAX PERKS TO RESHAPE THE HOLIDAY LET MARKET

The abolition of the FHL tax regime means that, from April 2025:

• No more tax relief on capital expenditure, such as furniture and fittings.
• Capital gains tax benefits will be lost, meaning landlords could face higher tax bills when selling holiday lets.
• Rental income will no longer be classed as relevant earnings for pension contributions, limiting tax-efficient investment strategies.
• This significant tax shift could alter financing strategies for holiday let landlords, with many now reconsidering their mortgage products, protection policies, and long-term investment plans.

For mortgage brokers, the change may drive increased demand for remortgaging and refinancing advice, particularly as some landlords pivot to long-term rental models or explore ways to mitigate tax burdens. The transition could also see a surge in portfolio restructuring.

Clients updating the use of their property — from short-term lets to long-term rentals or private use — will need to review and adjust their policies accordingly.

As property owners reassess their options, searches for “what insurance do I need for a holiday let” have risen by 10% year-on-year, suggesting that landlords are already looking for guidance. More than 100,000 people in the UK search for “cheap home insurance” each month, indicating that cost pressures may lead some to prioritise price over comprehensive cover.

Andy Hale, holiday home specialist at Intasure, said: “Short-term holiday lets comprise a significant portion of UK properties, making it crucial for second homeowners to be aware of changes to the Furnished Holiday Let tax relief. This awareness is essential to help prepare for additional costs that may accompany its abolishment.

“Short-term let owners should seek professional advice to explore additional reliefs available to them and transition effectively.”