As the UK Government announce quarantine free travel for double vaccinated holiday makers the Canary Islands are set to enjoy a resurgence in popularity.
The Canary Islands have long been a hot favourite with both British tourists and property investors. This chain of eight islands located off the coast of Africa and owned by Spain offer year-round sunshine, with temperatures climbing into the 20’s Celsius even during the winter months. Whilst all of the main budget airlines such as Ryanair and EasyJet offer regular services to the main islands of Tenerife, Gran Canaria and Lanzarote – with a flight time of just four hours the UK making them easily accessible and affordable.
Lanzarote is located at the eastern end of the Canary Islands chain and enjoys the driest climate of the lot, with minimal rainfall. Creating an arid environment with terrain which has often been likened to the surface of the moon, thanks also to the influence of massive volcanic eruptions which rocked the island back in the 1730’s.
As a result, sun starved tourists from Northern Europe can enjoy a sunshine break here whatever the time of the year. Which in turn has created plenty of opportunity for holiday rental investors, who are able to take advantage of the island’s traditionally buoyant tourist market and the growth of platforms such as AirBnB and Booking.com to create a steady stream of rental income.
The Canary Islands government estimate that there are now around 7,000 officially licensed rental properties on the island, accounting for around 10% of all available tourist beds. A fairly low ratio given the fact that prior to the pandemic Lanzarote was welcoming in excess of 3 million tourists per year – around 50% of these originating from the UK.
Where are the best locations for investors on the island?
Tourism on Lanzarote is concentrated in three main tourist resorts – Puerto del Carmen, Costa Teguise and Playa Blanca. Of these Puerto del Carmen is by some distance the largest and most popular, thanks to a fantastic microclimate, excellent beaches and close proximity the airport, keeping transfer times down to a very manageable ten to fifteen minutes.
Rural tourism is also a growing niche, as more visitors seek out the ‘real Lanzarote’ away from the main resorts. And this trend is particularly prevalent in the north of the island, where the bulk of Lanzarote’s unique cultural creations are situated, such as the Cactus Garden in Guatiza and the breath taking Jameos del Agua.
Investors should also bear in mind that the island is small – it only takes an hour or so to drive from one end to the other – so in reality location isn’t as critical. That being said the safest returns are on offer within Puerto del Carmen due to the sheer volume of demand.
How Much Does Property in Lanzarote Cost?
Overseas buyers can invest in a holiday property in Lanzarote from as little as €85,000. For this you can pick up a small apartment or a studio on a holiday complex in one of the main resorts.
Villas with pools start from around €250,000 in Playa Blanca, where there is a large supply of newer builds. However, prices for this type of property start at about €400,000 in Puerto del Carmen, as there are simply fewer of these types of unit available on the market.
How much income can a holiday rental property on Lanzarote generate?
The returns for investors are attractive as unlike most other holiday destinations here owners enjoy 12 months of income each year. One-bedroom apartments rent out from anywhere between €300 and €800 per week dependent on location, time of year and quality. Whilst villas with pools command weekly rentals of anywhere between €800 and €2,500.
What About Brexit – Can I Still Buy A Property In Spain?
Property owners enjoy the same rights that existed prior to the UK’s withdrawal from the EU. However there have been some important legal changes to the status of British nationals within the European Union which are important to bear in mind.
Firstly, British nationals no longer enjoy freedom of movement within the EU and can now only spend 90 days out of every 180 days in the EU. Which limits the amount of time they can spend in their own holiday home. And secondly, the tax rate levied on holiday rental income has increased – rising from 19% to 24%, with deductions versus tax also no longer allowed.